(Bloomberg) --

Turkey will inject around $3.3 billion into three state-run lenders to beef up their balance sheets as the government prepares a new loans package ahead of next year’s elections. 

The move by the sovereign wealth fund will boost the capital of TC Ziraat Bankasi AS, Turkiye Vakiflar Bankasi TAO and Turkiye Halk Bankasi AS by 20 billion liras ($1.1 billion) each, according to state-run Anadolu Agency. The wealth fund, known as TWF, owns all of Ziraat Bank and holds majority stakes in the other two state lenders. 

The banking index on Borsa Istanbul rose as high as 2.8%, outperforming the benchmark gauge. 

With six months left before the elections, President Recep Tayyip Erdogan’s focus is on firing up the economy through cheap loans to increase production and investment. 

The new government-backed loan package will be around $11 billion, Erdogan said on Monday. Treasury and Finance Minister Nureddin Nebati said on Thursday that the program would be available “to all citizens” next year. 

The government has long been relying on state lenders to keep credit flowing through the economy to help boost growth. 

But the lira’s decline eroded their cash buffers, requiring authorities to inject capital for the fourth time since 2019. The wealth fund provided more than $10 billion to shore up state lenders in three separate rounds in 2019, 2020 and 2022.

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