Recent Developments
Article 42(3) of the Capital Movements Circular dated May 2,
2018 (''Circular'') sets out that
foreign currency denominated funds provided by banks and factoring
companies to firms via purchasing existing or future trade
receivables other than export and transit trade receivables are
considered foreign currency denominated loans. However, the
Circular was silent on (i) the scope of the FX loans; and (ii) the
party of the underlying commercial relationship (i.e. buyer or
seller) to be reported to the Risk Center of Turkish Banks'
Association (''Risk Center'') for
the FX loans.
On July 20, 2020, the Central Bank of Republic of Turkey revised
the Circular in line with the letter No. 394743 issued by Ministry
of Treasury and Finance and provided clarifications regarding the
following points:
