The Central Bank of the Republic of Türkiye (CBRT) is introducing a new regulation that encourages companies to convert their foreign currency income from abroad into Turkish lira. Making a statement on the subject, Minister of Treasury and Finance Mehmet Şimşek said, "The issues discussed in the Financial Stability Committee are being put into action by the Central Bank. In this context, the Central Bank has introduced more flexible and simpler application conditions in the foreign exchange conversion support for companies, and steps have been taken to ensure that more of our companies benefit from this support."
"WE WILL CONTINUE POLICIES THAT STRENGTHEN THE REAL SECTOR"
Minister of Treasury and Finance Mehmet Şimşek, in his statement to the AA correspondent on the subject, explained that steps have been taken to increase the effectiveness of the CBRT's foreign exchange conversion support application and stated that the main purpose of the regulation is to make the support mechanism more effective, inclusive and compatible with the real economic activities of companies.
Stating that it will be easier for companies that contribute to exports through production and supply to access the support mechanism, Şimşek said:
"In this context, while introducing more flexible and simpler application conditions in the Central Bank's foreign exchange conversion support for companies, steps have been taken to ensure that more of our companies benefit from this support. We will always support our real sector, which produces, creates employment and added value, and will continue to support our companies by taking into account the suggestions coming from the field."
WHEN WILL IT ENTER INTO FORCE?
CBRT's "Communiqué on Amendments to the Communiqué on Supporting the Conversion of Companies' Foreign Currencies into Turkish Lira" was published in the Official Gazette in August, and all eyes were on the implementation instruction, which would include the details of the regulation.
In this context, the CBRT published the "Implementation Instruction on the Communiqué on Supporting the Conversion of Companies' Foreign Currencies into Turkish Lira".
The new implementation instruction, which abolishes the commitment not to buy foreign currency and is based on the added value of companies and foreign exchange position ratio, will come into force as of October 1.
According to the instruction, the amount of foreign currency that can be sold within the scope of support will be associated with added value and an upper limit will be imposed on the support amount.
Accordingly, the company's annual foreign exchange sales limit can be as much as the added value calculated by adding the annual operating profit to be obtained from the Revenue Administration and the 12-month labor cost to be obtained from the Social Security Institution.
A foreign exchange position requirement will be introduced instead of a commitment not to buy foreign currency. In this context, the ratio of liquid foreign exchange assets to net sales revenue or asset size (foreign exchange position ratio) of companies wishing to benefit from the support must not exceed 10 percent.
Companies will certify their foreign exchange position rates with the "Foreign Exchange Position Notification Form" prepared by a certified public accountant or independent accountant and financial advisor, which will be valid for 15 days.
IT WILL BE EASIER TO BENEFIT FROM THE SUPPORT
Suppliers using intermediary exporters will be able to benefit from support within their own limits.
Accordingly, in intermediary exports, companies that supply products for export will also be able to directly benefit from the support.
While the Turkish lira equivalent of the foreign currency sales carried out by the intermediary exporter on behalf of the supplier is transferred to the intermediary exporter, the support payment can be made directly to the supplier.
In these transactions, the supplier company's own foreign exchange sales and support benefit limits and foreign exchange position ratio will be taken into account. This will make it easier for supplier companies to benefit from the support.
ABUSE WILL BE PREVENTED
In addition, the duties and responsibilities of intermediary banks will be increased and the control mechanism will be strengthened.
Intermediary banks will be given the opportunity to receive a maximum of 1 percent commission on the support amount from companies.
The intermediary functions of banks, which play an important role in the effective execution of the application, will be strengthened, audit and control processes will be tightened and abuses will be prevented.
