Disinflation measures and the transmission to Turkish credit

The policy rate is important, but the effective cost of liquidity also depends on operations and the rates at which banks actually transact. An assessment should identify the relevant overnight market rate, funding mix, and maturity rather than assume the announcement fully describes each institution's marginal cost.

Targeted credit measures operate through another margin. They can constrain one product or encourage a shift toward another even where total lending continues to grow. An aggregate increase is therefore compatible with restraint in a specific category. Product composition must be retained before judging whether transmission is weak or strong.

Foreign-currency and lira loans also have different exposures. A lower quoted foreign-currency rate does not establish cheaper finance for a borrower with domestic-currency income. Exchange-rate risk and hedging cost belong in the comparison. The currency label cannot be separated from the borrower's receipts and obligations.

Assume a hypothetical loan stock rises from 100 to 130 over a year while the selected price index rises from 100 to 140. Its nominal growth is 30 percent, but the ratio of the two growth factors is 1.30 divided by 1.40, or approximately 0.9286.

The price-adjusted measure falls despite nominal expansion. This is not an estimate of Turkish credit or a claim that the consumer-price index is the correct deflator for every loan purpose. It demonstrates why rapid nominal lending in an inflationary environment does not alone establish an equivalent expansion in real purchasing capacity.

Exchange-rate valuation can further change the domestic-currency value of foreign-currency loans without new borrowing. A credit-flow analysis should separate that revaluation, repayments, and new disbursements. Otherwise, a larger lira-equivalent balance can be misread as fresh finance.

A company using a short-term revolving facility can feel a funding change quickly. A fixed-rate investment borrower may face it at refinancing. A household using an overdraft or credit card has a different contractual and regulatory position from a mortgage borrower.

The relevant exposure includes principal, rate reset, fees, maturity, collateral, and unused commitments. A quoted rate can remain unchanged while a lender reduces the approved amount or shortens the term. Those nonprice changes can materially tighten financing.

For firms, working-capital needs also respond to inflation. Higher input prices can require more nominal borrowing to maintain the same physical production cycle. Credit restraint can then affect inventories, supplier payment, or output even when it does not immediately reduce planned fixed investment.

A borrower with liquid assets can offset part of higher interest expense through deposit or investment income. The rates and timing need not match. Applying a rate change only to net debt can therefore misstate the cash effect if assets and liabilities reprice differently.

A nominal financing rate should be considered alongside expected inflation over a comparable horizon. The realized real cost can differ if actual inflation surprises. An ex ante assessment and an ex post calculation answer different questions and should not be presented as interchangeable.

There is no single expectation shared by all borrowers. Firms, households, and market participants can use different assumptions. A lender's expected return also depends on defaults and recovery, while the borrower's burden depends on its own selling prices and income. Subtracting the latest annual CPI from a loan rate is only a rough comparison, not a complete real-cost estimate.

As disinflation progresses, nominal revenue growth can slow while previously contracted debt payments remain. Businesses that planned on rapid price increases may face a tighter cash position. This transitional effect should be examined without assuming that lower inflation is itself a deterioration in long-term economic conditions.

Changes in supplier credit can reveal a financing response outside the bank data. A Turkish firm unable to obtain its preferred facility may delay payment to suppliers or request longer terms. That can transfer liquidity pressure along the production chain rather than eliminate it. Payment delays, receivable days, and trade-credit conditions therefore provide useful evidence alongside regulated loan growth and quoted lending rates.

Targeted measures can restrain riskier borrowing or support policy objectives, but their incidence requires evidence. A firm excluded from a preferred category may face tighter access, while a qualifying borrower obtains finance. Sector totals can conceal those differences.

The evaluation should also identify substitution. Borrowers may move between banks, products, trade credit, or other financing channels. A decline in one regulated product does not establish an equal decline in total indebtedness. Conversely, substitution can be costly or unavailable, producing a genuine financing constraint.

Loan quality needs follow-up. Restructuring can change the timing of payment and the reported classification without eliminating the underlying obligation. Repayment performance, collections, provisions, and borrower cash flow should be read together. A favorable aggregate ratio cannot establish resilience in every segment.

Türkiye's disinflation measures should consequently be assessed as an interacting configuration of prices, liquidity, and lending rules. The May 2026 report provides evidence that these channels affected both cost and composition. Their economic transmission is best demonstrated through comparable borrower terms, adjusted credit flows, and actual expenditure rather than a single policy-rate movement or nominal lending aggregate.