In our previous articles, we mentioned that Foreign Currency Debts and talked about the legal methods that can be applied in case of changing exchange rate differences.
As a result of the developments in the country and the world economy, subparagraph (g) was added to the 4th article of the “Decision on the Amendment of the Decision No. 32 on the Protection of the Value of Turkish Currency” dated 12/09/2018, and a limit was imposed on foreign currency borrowings.
According to this decision, the resident in Turkey, except for the cases determined by the Ministry, the contract price and other payments arising from these contracts in all kinds of movable and real estate rental, leasing, work, service and work contracts among themselves, including movable and real estate purchase and sale, vehicle and financial leasing. It will not be able to decide on its liabilities in foreign currency or indexed to foreign currency.
In addition, in the continuation provisions of the aforementioned decision, it is regulated that within 30 days from the effective date of the above article, the amounts agreed in foreign currency in the contracts in force, which are given in the aforementioned paragraph, must be re-determined by the parties in Turkish currency, except for the cases determined by the Ministry.
This decision has rule into force since its publication in the Official Gazette on 13/09/2018 and as of this date, this restriction will be applied in terms of the contracts mentioned above.
The relevant decision is as follows;
DECISION TO AMEND DECISION NO. 32 ON PROTECTING THE VALUE OF TURKISH CURRENCY
ARTICLE 1- The following paragraph has been added to the 4th article of the Decision on the Protection of the Value of Turkish Currency dated 7/8/1989 and numbered 32.
“g) Except for the cases determined by the Ministry, the contract price and other payments arising from all kinds of movable and immovable rental, leasing, work, service and work contracts among themselves, including movable and real estate purchase and sale, vehicle and financial lease liabilities cannot be determined in foreign currency or indexed to foreign currency.”
ARTICLE 2- The following provisional article has been added to the same Decision.
“Provisional Article 8 – Within thirty days from the date of entry into force of clause (g) of Article 4 of this Decision, the amounts specified in the aforementioned clause and determined in foreign currency in the previously concluded contracts, except for the cases determined by the Ministry; It is re-determined by the parties in Turkish currency.”
ARTICLE 3-This Decision rules into force on the date of its publication.
ARTICLE 4- The provisions of this Decision are executed by the Minister of Treasury and Finance.