The Central Bank of the Republic of Türkiye (CBRT) is moving to a new phase in its support program, which encourages firms to convert their foreign currency revenues earned abroad into Turkish lira. The new implementation directive will take effect on October 1.
Treasury and Finance Minister Mehmet Şimşek said the issues addressed by the Financial Stability Committee had been put into practice by the CBRT, adding that the regulation aims to enable more firms to benefit from foreign exchange conversion support.
Foreign currency sales limit to be determined by added value
Under the implementation directive published by the CBRT, the amount of foreign currency that can be sold under the support program will be linked to the firm’s added value, and an upper limit will be imposed on the support amount.
A firm’s annual foreign currency sales limit may be equal to its added value, calculated as the sum of its annual operating profit obtained from the Revenue Administration and its 12-month labor costs obtained from the Social Security Institution.
The new regulation removes the commitment not to purchase foreign currency and introduces a foreign exchange position requirement instead. Firms seeking to benefit from the support will need to have a foreign exchange position ratio of no more than 10%; this ratio is calculated by comparing their liquid foreign currency assets with their net sales revenue or total assets.
Firms will document this ratio using a Foreign Exchange Position Declaration Form prepared by a certified public accountant or an independent accountant and financial adviser. The form will be valid for 15 days.
Direct support for suppliers in intermediary exports
Supplier firms that use an intermediary exporter will also be able to benefit from the support within the limits applicable to them. Firms supplying products for export will be given direct access to the support mechanism.
While the Turkish lira equivalent of the foreign currency sale conducted by the intermediary exporter on behalf of the supplier is transferred to the intermediary exporter, the support payment may be made directly to the supplier firm. In these transactions, the supplier’s own foreign currency sales and support limits, as well as its foreign exchange position ratio, will be taken into account.
Banks’ control responsibilities to increase
Under the new system, the duties and responsibilities of intermediary banks will be increased, while audit and control procedures will be tightened. Banks will be allowed to charge a commission of up to 1% of the support amount.
Treasury and Finance Minister Mehmet Şimşek said the regulation would be implemented in a way that supports the real sector’s capacity to generate production, employment and added value.
