Istanbul chamber seeks end to mandatory foreign currency sales by exporters

ISTANBUL

The head of the Istanbul Chamber of Commerce (İTO) has welcomed changes to the Central Bank’s foreign exchange conversion support scheme while calling for the removal of a rule requiring exporters to sell 35 percent of their export proceeds.

The Central Bank amendment, published in the Official Gazette on Aug. 1, removes a requirement that firms seeking conversion support pledge not to purchase foreign currency for one month.

İTO President Şekib Avdagiç said the restriction had created difficulties, particularly for manufacturers relying on imported inputs.

Its replacement with an assessment based on firms’ foreign exchange positions was more consistent with commercial conditions, he added.

Avdagiç also welcomed the alignment of the scheme with rules governing rediscount loans for exports and foreign exchange-earning services, saying it would reduce compliance costs.

Under the revised rules, intermediary exporters that reach their value-added-based limits will be able to conduct conversion transactions on behalf of suppliers producing higher-value-added goods. The support payment will be transferred directly to the supplier.

Avdagiç said the change would bring small and medium-sized manufacturers that produce for exporters but do not export directly into the scheme for the first time.

Most of the new provisions will take effect on Oct. 1, while further details will be set out in the Central Bank’s implementation instructions.

The 3 percent conversion support rate and the requirement to sell 35 percent of export proceeds have been extended until Jan. 31, 2027.

“The business community ultimately expects the 35 percent export-proceeds sale requirement to be removed entirely,” Avdagiç said.