Recent Development
The Central Bank of Republic of Turkey revised Article 19 of the Capital Movements Circular (the “Circular”), in which the general principles of disbursement of loans from abroad were unclear regarding currency. The Circular was revised in line with the letter dated April 14, 2020 No. 1130224 issued by the Ministry of Treasury and Finance and clarified the following points:
- Foreign exchange loans extended from abroad can be disbursed or repaid in a foreign currency or multiple foreign currencies other than the foreign currency specified in the loan agreement.
- In cases where the loan is utilized or repaid in a foreign currency that is different than what is specified in the loan agreement, the currencies will be converted using the Central Bank's cross exchange rates on the date of transfer.
Conclusion
The amendment clarified that there are no restrictions regarding the currency to be used while utilizing or repaying loans extended from abroad.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.