The amendments to the Decree No. 32 Regarding the Protection of the Value of the Turkish Currency published in the Official Gazette on September 13, 2018 introduced a ban on FX and FX-indexed payments for certain agreements between Turkish residents. The Ministry of Treasury and Economy (the “Ministry“) was authorized to provide exemptions to these restrictions. Accordingly, the Ministry introduced these exemptions by amending the Communiqué No: 2008-32/34 on the Decree No. 32 Regarding the Protection of the Value of the Turkish Currency.
The issue of whether insurance, reinsurance and pension agreements fall within the scope of the FX payment ban was highly debated.
The Ministry clarified that these agreements are not within the scope of the FX payment ban and therefore, can be denominated in FX or FX-indexed through its letter dated December 11, 2018 sent to the Turkish Insurance, Reinsurance and Pension Companies Association.