The Central Bank of the Republic of Turkey (CBRT) published the “Communiqué on Amending the Communiqué on Supporting the Conversion of Firms' Foreign-Origin Foreign Exchange into Turkish Lira” in the Official Gazette. With the communiqué, a new value-added-based framework was introduced for the FX conversion support scheme.
New Value-Added-Based Criteria
According to the regulation, firms will be able to benefit from FX conversion support in proportion to the value-added they generate. Profitability and labor costs will be taken as the basis for value-added calculation. When intermediary exporters reach their limits, they will be able to carry out FX conversion transactions on behalf of their high-value-added suppliers, in which case the support payment will be deposited directly into the supplier's account.
FX Position Requirement Introduced
As with export and foreign exchange earning services rediscount credits, the previously applied commitment not to purchase foreign currency has been lifted. In its place, a restriction based on firms' FX positions has been introduced. Firms that will benefit from the support will not be able to exceed the upper limit set by the Central Bank prior to application.
Banks' Intermediary Role Strengthened
In order to enhance the effectiveness of the practice, banks' intermediary functions were strengthened while additional measures were also taken. These changes will come into effect as of October 1. Details regarding the practice will be outlined in the Implementation Directive to be published by the Central Bank.
Temporary Support Rates Extended to 2027
With the communiqué, the base rate of FX conversion support has been set at 2 percent. However, the duration of the current temporary measures has been extended. The temporary period for the 3 percent support payment and the application of the export proceeds sales obligation at 35 percent will continue until January 31, 2027. These temporary provisions were previously set to expire on July 31.
