Significant amendments to Decree No. 32 on the Protection of the Value of Turkish Currency entered into force through Presidential Decree No. 9595, published in the Official Gazette dated 15 March 2024 and numbered 32842.
These amendments introduced new provisions in various areas, particularly foreign exchange, derivative precious transactions, metals, and foreign exchange regulations, and broadened the scope of existing practices.
Increased Limit for Turkish Lira Carried Abroad
With the recent amendment, the upper limit for physically carrying Turkish lira out of Türkiye has been increased from TRY 25,000 to TRY 185,000. Accordingly, individuals may now take up to TRY 185,000 in cash abroad. For cash amounts exceeding this limit, a cash declaration form must be submitted, as required under the current practice.
A New Era in Foreign Derivative Transactions
Under the new regulation, as a general rule, the trading of all types of derivative instruments, including forward and option contracts carried out abroad, must be conducted through banks and intermediary institutions authorized by the Capital Markets Board ("CMB"), provided that the transfer of funds is made through banks. However, as an exception to this rule, transactions carried out by residents of Türkiye on their own initiative with foreign financial institutions are exempt from this requirement. In such cases, only the fund transfers arising from these transactions must be conducted through banks.
In addition, promotional, advertising, and marketing activities by foreign financial institutions targeting residents of Türkiye have been prohibited.
Restriction on Overseas Transfers in Leveraged Transactions and Enhanced Oversight Process
The provision requiring that leveraged transactions and derivative instrument transactions subject to the same rules be conducted exclusively through institutions authorized by the CMB remains in effect. However, the new regulation explicitly prohibits unauthorized individuals and entities from intermediating such transactions and restricts the transfer of funds abroad related to these transactions.
Additionally, banks and payment and electronic money institutions are now obligated to take preventive measures. A coordination and direct information sharing mechanism has been established among the CMB, the Banking Regulation and Supervision Agency, and the Central Bank of the Republic of Türkiye ("CBRT") to monitor such transactions. In case of any violations, notification must be made to the Ministry of Treasury and Finance.
Restriction on the Sale of Drawn Precious Metals
Under the new regulation, drawn precious metals may only be sold to other residents in Türkiye by jewelry businesses authorized by the Ministry of Trade or by individuals whose tax certificates indicate that they are engaged in the production or trade of precious metals. Sales to individuals or entities that do not meet these conditions are prohibited.
Foreign Currency and Precious Metal Guarantees in Loan Collateral
The new regulation allows residents of Türkiye to provide guarantees and sureties in foreign currency or precious metals, through their group companies or direct shareholders to domestic banks and financial institutions, in relation to loans obtained in foreign currency or precious metals within Türkiye.
A New Era in Precious Metal Accounts and Foreign Exchange Status
The scope of gold deposit accounts, which can be opened by the CBRT and banks, has been expanded and redefined to include all types of precious metals. With this amendment, account holders are granted greater flexibility in managing these assets, including the ability to set interest rates and execute redemption transactions.
Under the new regulation, transactions involving the purchase and sale of precious metals through deposit accounts without physical delivery will now be considered foreign exchange transactions. These transactions will be monitored and regulated under foreign exchange legislation, similar to currency operations. The aim of this regulation is to ensure proper record-keeping and enhance transparency in the markets.
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.
