Given the turbulent financial markets (putting it mildly) over recent months, we thought it would be useful to mention what is happening with interest rates in Turkey at the moment.

Many foreigners have brought money to Kalkan in recent years - hence the number of banks - currently 6 but with rumours of at least one more on the way.  People have been tempted by relatively high rates of interest available on savings accounts.  Certainly in the UK, the rates on offer look pretty miserable right now.

The table below shows that whilst interest rates in Turkey are still quite high, they have been coming down over recent months.  This is as a direct result of the global economic crisis, which has seen rates tumbling all over the world.

* The rate shown is the Central Bank of Turkey lending rate, which broadly equates to the sort of rate you can expect on investing a significant lump sum with a Turkish bank.

The dates are when the Turkish Monetary Policy Committee have made their monthly public announcements on interest rates.  We also show the prevailing foreign exchange rate (GBP/TRY) and also the year on year CPI rate of inflation.

If you were investing £100,000 in Turkish lira, back in June 2008 you would have earned the equivalent of just over £1,400 in one month, net of tax.  Investing the same amount now will give you about £800 net of tax.  Quite a drop.

The outlook for interest rates, according to the latest announcement from the Turkish Monetary Policy Committee is for rates to continue downward, although any further cuts 'may be measured', which we take to mean small.

If you want to read more about the Turkish economy and the financial outlook, see the Central Bank of Turkey website, select Announcements, and then select the subject you are interested in, for example, the press release on interest rates dated 16.06.09.