Turkey’s banking watchdog eases regulations on lira lending to FX-rich businesses

Skyscrapers are seen in the Levent business and financial district, which includes the headquarters of major banks and corporations, in Istanbul, Turkey, March 29, 2019. REUTERS/Murad Sezer

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ISTANBUL, July 7 (Reuters) – Turkey’s banking watchdog BDDK on Thursday eased some of the regulations that prevented foreign-currency-rich businesses from getting loans in Turkish liras.

A decision posted on the BDDK’s website showed that it exempted companies whose audit obligations begin at the end of 2022 from the new regulations, in addition to relaxing certain steps regarding documentation and other regulations. .

Two weeks ago, the BDDK restricted access to new lira loans for companies subject to independent audit if they held more than 15 million lira ($908,000) in foreign currency assets and exceeded 10% of total assets or annual income. Read more

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The move was part of efforts to stabilize the Turkish lira after it fell 24% this year from 44% in 2021 and help the central bank build up its depleted foreign exchange reserves.

The Istanbul Chamber of Industry (ISO) on Tuesday expressed concern over the latest regulations, saying exporters were facing serious problems accessing finance and describing the situation as a “financial bottleneck”.

The BDDK had met with the “Big Four” auditing firms last week to discuss uncertainties surrounding the new regulations, sources said.

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Reporting by Ali Kucukgocmen and Ebru Tuncay; Editing by David Gregorio

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