“March 19 Operation” Triggers Surge in Loan and Deposit Rates: Babuşcu

The aftermath of Istanbul Mayor Ekrem İmamoğlu’s arrest on March 19 continues to send shockwaves through Türkiye’s financial system. Former Ziraat Bank Deputy General Manager Prof. Dr. Şenol Babuşcu has attributed the recent spike in interest rates across the board to what he calls the “March 19 operation.”

According to the latest figures from the Central Bank of the Republic of Türkiye (CBRT), consumer loan, commercial loan, and short-term deposit interest rates have risen significantly over the past four weeks — a development Babuşcu links directly to the political volatility triggered by İmamoğlu’s detention.

Key Data Highlights from CBRT (14 March – 11 April 2025):

• Consumer loan rates jumped by 6.94 percentage points, reaching ~70%

• Commercial loan rates increased by 5.29 points, climbing to ~60%

• Three-month term deposit rates rose 4.69 points, hitting ~55%

Timeline: Post-Arrest Financial Shock

Babuşcu, sharing his analysis on social media, emphasized that the interest rate hikes accelerated rapidly after March 19. “The impact of the March 19 operation is most visible in consumer and commercial loan rates, as well as deposit interest,” he wrote.

A review of weekly CBRT data confirms that the largest rate movements occurred in the weeks immediately following the arrest, aligning with heightened market unease, increased foreign exchange demand, and rising inflation expectations.

Political-Economic Nexus

The arrest of İmamoğlu, Türkiye’s leading opposition figure and a declared presidential candidate, ignited mass protests, intensified capital outflows, and forced the central bank to intervene in FX markets, reportedly depleting over $50 billion in foreign reserves. The resulting credit market shock has now materialized in the form of surging borrowing costs, with banks tightening conditions in response to perceived political and economic risk.

What Experts Are Saying

“We are seeing a direct consequence of political instability translating into financial volatility. The rise in borrowing costs is not a mere reflection of monetary policy tightening—it is also a reaction to the loss of confidence and perceived risks.”
— Prof. Dr. Şenol Babuşcu

Related Economic Keywords:

Türkiye interest rate hike 2025, March 19 İmamoğlu arrest effect, Şenol Babuşcu analysis, CBRT loan interest spike, Turkish credit market shock, deposit interest rates Türkiye, political risk in Turkish economy, post-arrest financial instability

Outlook

With consumer interest rates hovering near 70%, Türkiye is now facing one of the steepest credit environments among major emerging markets. The central bank’s recent 350 basis point rate hike to 46% underscores efforts to restore control. However, economists warn that unless political uncertainty stabilizes, monetary tightening alone may not be sufficient to restore investor and consumer confidence.