Recent developments in Turkish financial regulations in May 2019

Financing package for strategic sectors
Minister Berat Albayrak has announced that Turkey will provide a TRY 30 billion (USD 4.9 billion) financing package to sectors that have export potential but are riddled with foreign trade deficit and high import dependency. Such financing will be provided by three state-owned banks, Ziraat Bankası, Vakıfbank and Halkbank.
One-day waiting period for the purchase of FX equal to or over USD 100,000
According to the Banking Regulation and Supervision Agency’s decision dated 21 May 2019, FX (foreign exchange) purchases amounting to USD 100,000 and above (or equivalent amounts in other currencies) by individuals (only real persons, not legal entities/persons) will be performed with a one-working day settlement delay. Accordingly, FX purchases will be transferred to the individuals’ accounts with a delay of one working day.
The Central Bank raises foreign currency reserve requirements
The Central Bank of Turkey (“Central Bank”) increased reserve requirement ratios for FX deposits by 200 basis points in order to support financial stability. According to a written statement issued by the Central Bank, it is expected that the measures will remove around USD 4.2 billion of liquidity the market.
Transfer of pension funds to the Treasury
According to the announcement of the Capital Markets Board (“CMB”), as of 31 July 2019 pension […] i.e. 25% of the total TRY 10.5 billion in the repo market, are expected to be transferred to government bonds by the end of July.
Plans to tap the Central Bank’s reserve funds
According to publicly available sources, the Ministry of Treasury and Finance is working on a legislation to transfer the Central Bank’s reserves amounting to TRY 40 billion (USD 6.7 billion) to the government’s budget. The reserve funds were to be used by the Central Bank to maintain financial sustainability under extraordinary circumstances. This transfer would aim to strengthen and prevent further deterioration in the budget.

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In compliance with Turkish bar regulations, opinions relating to Turkish law matters that are included in this client alert have been issued by ğzdirekcan Dündar Şenocak Avukatlık Ortaklığı, a Turkish law firm acting as correspondent firm of Gide Loyrette Nouel in Turkey.