Turkey | Another brick in the new F/X regulations: brief overview of the new circular on capital movements
31 May 2018
Newsletter | Turkey | Banking & Finance
Following the amendments made in Decree No. 32 on the Protection of the Value of the Turkish Currency ("Decree No. 32") and the introduction of a new monitoring mechanism by the Central Bank of the Republic of Turkey ("Central Bank") under the Regulation on the Implementation and Principles regarding Monitoring of the Transactions Affecting Foreign Exchange Position by the Central Bank of the Republic of Turkey, all players in the Turkish financial market were waiting for the Central Bank to make the necessary changes in its circular on capital movements to clarify recent protectionist measures in Turkish foreign exchange regulations. As expected, the Central Bank issued its new circular on capital movements ("Circular on Capital Movements") on 2 May 2018, which was also the date determined as the date of entry into force of the amendments made of Decree No. 32.
Unlike its established practice under the Circular on Capital Movements No. 2002/YB-1, updated in the past 15 years by way of reference to letters of the Undersecretariat of Treasury and several other state administrations, the Central Bank adopted a new approach by issuing a completely new circular which consists of 9 main sections and 53 articles.
This Client Alert aims to briefly review significant changes brought in the Circular on Capital Movements as regards changes in Turkish foreign exchange regulations, and highlight certain issues which are not regulated in detail under Decree No. 32.