BRSA repeals Turkish lira borrowing restrictions

Turkish lira borrowing restrictions and latest development

On June 24, 2022, the BRSA introduced certain Turkish lira borrowing restrictions for non-financial institution borrowers subject to independent audit through its decision numbered 10250, which was later amended by its decision dated July 7, 2022 and numbered 10265. These decisions imposed various restrictions on the borrowing of Turkish Lira commercial cash loans by the relevant companies, based on the amount of their foreign exchange (FX) cash assets, including gold, foreign currency cash, foreign exchange deposits, foreign currency-denominated securities (excluding Eurobonds issued by the Republic of Türkiye), stocks issued by non-residents, and other monetary assets such as reverse repos with non-residents.

Accordingly, subject to certain exceptions for companies that were not permitted to borrow FX loans, companies with FX cash assets exceeding TRY15,000,000 were prohibited from borrowing Turkish lira commercial cash loans, if their FX assets exceeded 10% of the higher of their net assets or net sales revenue from the previous financial year, based on their most recent financial statements as of the loan application date. On October 21, 2022, the BRSA tightened these restrictions by reducing the threshold of TRY15,000,000 to TRY10,000,000, and lowering the 10% ratio to 5%, effective from November 1, 2022.

On February 6, 2025, as part of macroprudential simplification steps to strengthen financial stability and ensure the effective functioning of the credit system, the BRSA repealed its previous decisions introducing the Turkish lira borrowing restrictions, thereby allowing the affected companies to obtain Turkish lira commercial cash loans from banks and financial institutions without being subject to any such limitations.