The Effect of Interest Rates on Consumer Credit in Turkey

Mustafa İbicioğlu and Mehmet Baha Karan

Journal of BRSA Banking and Financial Markets, 2009, vol. 3, issue 2, 11-30

Abstract: This paper investigates the effect of the variation in the interest rates on consumer credit. The interest rate plays the central role in the regressin model as the main independent variable affecting consumer credit demand. The relationship between consumer credit and Istanbul Stock Exchange (ISE) national index as well as consumer confidence index is also investigated as these variables are considered to reflect the economic expectations. It is concluded that consumer credit demand is sensitive to the variations in the interest rates based on the regression model using monthly data covering the 2004:4 2009:2 period. On the contrary, consumer confidence index and ISE national index are found not to have a statistically significant effect in explaining the variation in consumer credit

Keywords: Consumer Credit; Interest Rates (search for similar items in EconPapers)
JEL-codes: E21 E43 (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:bdd:journl:v:3:y:2009:i:2:p:11-30

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