ANKARA – Turkey’s ruling party is moving to reduce lending rates the state-owned Halk Bank charges small Turkish firms to a simple 30 percent yearly from 44 percent, well below market rates, bank officials said yesterday. The lending rate cut, due this week, increases suspicion that the government is not fully committed to IMF reform, which has bolstered the independence of a board managing Turkey’s public banks, analysts say. Previous governments had often awarded cheap credits to their supporters via state-owned banks, a practice that helped cause big losses. IMF reform has bolstered the independence of the board managing Turkey’s state-owned banks. The decision, signed by ministers at a meeting of the Cabinet yesterday, would not put pressure on the balance sheet of Halk, one of Turkey’s largest banks slated for sale under a $16 billion IMF pact, officials at the bank said. Most of Turkey’s private banks offer a simple interest rate of 42-48 percent yearly on their lending. The Justice and Development Party (AK), behind on a program of IMF-backed legislation, is working to bolster economic growth in Turkey it says is being pegged back by high real interest rates – the difference between debt yields and projected inflation. «Markets may be worried about the fact that the move goes back to past government subsidies through state banks,» said Simon Quijano, an analyst at Bank Austria-Creditanstalt, a unit of Germany’s HVB Group. «It’s not quite clear what the motives are behind this. I presume it is a move to put pressure to get interest rates down further.» Halk is one of three lumbering state banks in a sector seen as the heart of a financial crisis in 2001. Turkey has since spent billions of dollars rehabilitating its banking sector. The state banking board has said it aims to privatize Halk Bank by the end of November. The new interest rate Halk Bank is due to charge will be levied on loans to cooperatives formed by small and medium-sized firms. The AK has replaced directors at the board, once given increased independence under IMF reforms, raising concern that the banks’ resources might be used to favor party loyalists. Government ministers have called on the central bank to lower interest rates to encourage lending to an economy recovering from its worst recession since World War II.