Recent Development
The Capital Movements Circular introduced further flexibilities for FX borrowing restrictions.
What’s New?
Prior to the recent amendment, Turkish resident companies were not entitled to lend FX loans to their Turkish-resident affiliates. With the amendment, the proceeds of such FX loans can be provided in FX to the extent that the loan transaction is conducted within the same group, and the denomination of the loan and monitoring thereof are in Turkish Lira (TRY).
Conclusion
It is now possible to make use of FX balances for intragroup lending which provides considerable flexibility for intragroup lending. However, intragroup lending must not turn into a lending business. Only financial institutions appropriately licensed can carry on a lending business in Turkey.
