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Legal Alerts

03/09/2020

Turkish FX Laws: Changes to Capital Movements Circular

Legal Alerts
Banking & Finance
Financial Institutions

Recent Developments

The Central Bank of the Republic of Turkey (the “CBRT“) introduced an amendment to the Capital Markets Circular concerning the calculation of loan balances (the “Amendment“) on August 26, 2020.

Whats’s New?

Pursuant to the Amendment, FX loans that are unlawfully extended to residents in Turkey will be included in the FX loan balance calculation.

However, if the FX loan balance exceeds USD 15 million upon unlawfully extended loans being included in the calculation, the surplus will not be considered in the FX loan balance calculation.

Conclusion

The Amendment clarifies the calculation of USD 15 million FX loan balance required for utilizing a new FX loan and excludes the unlawfully utilized loans from this calculation.