New Regulation on monitoring of the transactions affecting the foreign currency positioning by the Central Bank
A new regulation on monitoring of the transactions affecting the foreign currency positioning by the Central Bank has been published on the Official Gazette and entered into force on 17 February 2018 (the “Regulation“). A summary of what is introduced with the new Regulation can be found below.
- Companies having a sum of (i) foreign currency cash loans utilized from abroad and within Turkey and (ii) foreign currency indexed loans equal to or higher than USD 15 million are obliged to notify the Central Bank of Turkey on the information requested via data form and in line with the Regulation, as from the subsequent financial year. Exchange rate published on the official gazette of the last day of the relevant calculation period should be used in converting other foreign currency loans into USD to test if the USD 15 million thresholdshave been reached.
- Obligation of notification terminates following the subsequent financial year in case the sum of foreign currency cash loans and foreign currency indexed loans falls below the limit specified by the Bank
- Notifications shall be completed in accordance with the financial reporting framework at the end of the first following month with regards the interim financial years terminating on March 31th June 30th and September 30th of the relevant financial year and at the end of the following three months in terms of the financial year terminating on December 31th.
- Companies that are in the scope of the notification obligation should enter into an agreement with an auditor within 60 days as of the commencement of the notification obligation. Audit of the submitted data concerning the financial year shall be concluded until May 31th by the auditor including their consistency with the previous interim data reports; and uploaded to the system established by the Central Bank of Turkey for the management of currency risk. The Bank shall perform cross check on the date submitted by the auditor.
- The Bank shall establish the Systemic Risk Data Tracking System consisting of database and regulations in order to improve efficiency on currency risk management.
- In the event of non-compliance with the notification obligation or in case of providing misleading data, judicial fine may be applicable as required by article 68 of the Law No. 1211.
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