Turkish banks loans growth continues to decline

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ISTANBUL Feb 13 Growth in Turkish bank loans slowed to less than 26 percent year-on-year at the beginning of February, adding to signs to a gradual economic slowdown after a year of unorthodox monetary policy by the central bank aiming at preventing overheating. The figures were sharply above numbers of closer to 10 percent given by central bank governor Erdem Basci last month and were not directly comparable. But they gave the same indication of a steady easing of the loan growth which drove Turkey's double-digit economic expansion a year ago. Loan growth stood at 25.47 percent from a year earlier as of Feb. 3, declining from 26.37 percent a week earlier, according to the weekly data published by banking regulator BDDK.

Year-on-year loans growth stood at 29.50 percent at the end of 2011, above the central bank's target of 25 percent growth for the full year.

The central bank had said it wanted to keep loan growth to 25 percent in 2011, after loans expanded 34 percent in 2010, fuelling demand for imports that have led to worryingly high external deficits.

The nominal figures provide the basis for the Turkish central bank's considerations on monetary policy, although it tends to refer publicly to numbers adjusted for shifts in exchange rates.