THE MINISTRY OF TREASURY AND FINANCE PUBLISHED AN ANNOUNCEMENT ON THE MINISTRY’S WEB SITE REGARDING THE CONTRACT VALUES IN FOREIGN EXCHANGE OR INDEX TO THE FOREIGN EXCHANGE IN 2018

By making amendments to the Decree No. 32 on the Protection of the Value of Turkish Currency with the Presidential Decree No. 85 dated 12.09.2018, published in the Official Gazette, it is made regulations for the residents in Turkey, with some exceptions, regarding not to do contract containing the price of foreign currency or foreign currency indexed with each other and to convert the values in existing contracts into Turkish lira. Exceptions to the aforementioned regulations are determined in the Communique No. 2008-32 / 34 on the Decree No. 32 on the Protection of the Value of Turkish Currency.

In the aforementioned regulation, if the parties fail to agree on foreign currency-indexed contracts or contracts that include foreign exchange, the principles regarding the conversion of the values to Turkish lira and the increase rates to be applied in the two-year transition period to the prices determined as Turkish lira in residential and business lease contracts are determined. In this respect, it is regulated under the relevant regulations that the transition will end at the end of the two-year period and if the parties cannot agree on the increase rate to be applied to the Turkish lira prices, the increase rate will be subject to the limits in the article 344 of the Code of Obligations numbered 6098.

the Ministry of Treasury and Finance noticed that after the expiry of the two-year period foreseen for the transition period, it is not possible to apply the amounts included in the said contracts in foreign currency or indexed to foreign currency again, or to be determined in foreign currency or indexed to foreign currency again, and in case of detecting otherwise, necessary sanctions will be applied in accordance with the foreign exchange legislation.

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