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ARTICLE · 28 FEBRUARY 2023

Strict Restrictions On Borrowing FX Loans

Schoenherr (Schönherr Rechtsanwälte)
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A protracted economic depression and COVID-19 restrictions have caused financial pressure in many local and regional companies operating in Turkey.

TurkeyFinance and Banking
Didem Kara
Didem Kara
Murat Kutluğ
Murat Kutluğ
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A protracted economic depression and COVID-19 restrictions have caused financial pressure in many local and regional companies operating in Turkey.

The downturn has created cash-strapped companies, most of which have preferred the option of borrowing FX (foreign currency) loans from their foreign shareholders. The regulator, in line with its policy of decreasing the public and private sector's short FX position, has adopted certain restrictions on FX loans.

Main restrictions on FX Loans

Turkish residents (including Turkish companies) are only entitled to borrow FX loans either from abroad or from Turkey if they generate foreign currency income in consequence of their operations. The FX loans cannot exceed foreign currency income generated within the last three financial years.

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