New restrictions on commercial TRY loans

The Banking Regulatory and Supervisory Authority’s (“BRSA”) decision in Turkey, dated July 7^th, 2022  and numbered 10265, regarding the restrictions on commercial loans denominated in TRY has been amended by the BRSA’s new decision dated October 21^st, 2022 and numbered 10389.

With this amendment, the BRSA has taken a new macro precautionary measure that has tightened the loan market.  Accordingly, effective of November 1^st, 2022, non-financial Turkish legal entities, which are subject to independent audit and have foreign currency assets exceeding TRY 10 million, are prohibited from utilizing commercial cash loans denominated in TRY in case their foreign exchange assets exceed 5% of their net assets according to their most recent financial statements or their net sales revenue of the latest financial year.

The previous thresholds on the foreign exchange assets, according to the BRSA’s earlier decision dated July 7^th, 2022 and numbered 10265, were TRY 15 million and 10%.