New Regulation in KKM

The Central Bank of the Republic of Turkey (CBRT) has removed the foreign currency protected deposit (KKM) support provided to legal entities with foreign currency liabilities through a communiqué published in the Official Gazette.

According to the decision published in the Official Gazette, the “Communiqué on Support for Foreign Currency or Turkish Lira Deposits and Participation Accounts of Legal Entities with Foreign Currency Liabilities” (Notification No: 2023/6), which came into effect with the publication in the Official Gazette dated March 30, 2023, and numbered 32148, has been revoked. The regulation took effect upon publication, and its provisions will be executed by the CBRT President.

This decision indicates the end of KKM support for legal entities with foreign currency liabilities and raises discussions regarding new balance searches in financial markets.

The default interest rate for late payments has been set at 53.25%.

The CBRT has determined the annual default interest rate for late payments made to creditors in the procurement of goods and services at 53.25%. This decision, taken in accordance with the relevant provisions of the Turkish Commercial Code, will apply in cases where the interest rate is not specified in the contract or the provisions are invalid. Additionally, the minimum reimbursement amount that can be claimed for collection costs has been set at 1,475 TL. This regulation has started to be implemented from January 1, 2025.

The increase in the default interest rate is seen as a significant regulation expected to affect payment habits and cash flow in commercial relationships.