Recent Change In The Foreign Exchange Loan Regime

The Counsel of Ministers has amended Article 14 of the Decree No. 32 on the Protection of the Turkish Currency ("Decree No.32"), effective from 15 July 2009. As known, the superseded Article 14 of the Decree No.32 had classified the use of foreign exchange loans ("FX Loans") into three categories which can be summarized as follows:

• Local companies that generate income on foreign exchange ("F/X Income Generating Companies") were permitted to utilize FX Loans that have a maturity of up to 18 months and foreign exchange index loans (dövize endeksli kredi) from locally licensed financial institutions;
  

• Local companies that generate income on local currency (i.e. Turkish Lira) ("TRY Income Generating Companies") were permitted to utilize foreign exchange index loans from locally licensed financial institutions. However, they were not permitted to use FX loans from local finance institutions.