Recent Developments And Penalties On The Prohibition On Contracts In Foreign Currency In Turkey

Pursuant to the Communiqué on the Decision No. 32 on the Protection of the Value of Turkish Currency (Communiqué No. 2008-32/34), in many types of contracts the contract price and other payment obligations may not be determined in foreign currency or indexed to foreign currency. Although the prohibition on contracts denominated in foreign currency was lifted for movable sales contracts (excluding vehicles) with the amendment made on 6 March 2025, it continues to be significant in terms of the applicable sanctions. In 2025, the administrative monetary fine ranges between TRY 72,252.00 and TRY 602,778.00. The effect of a breach of the prohibition on the validity of the contract remains a matter of debate. However, recent decisions of the Court of Cassation emphasize the invalidity of such contracts on the grounds that the relevant communiqué is based on public order.