IS THE PROHIBITION ON FOREIGN CURRENCY CONTRACTS STILL IN EFFECT?
As known, Constitutional Court’s (the “Court”) decision dated 15.10.2025 with Case No. 2024/193 and Decision No. 2025/136, regarding the prohibition on foreign currency contracts, was published in the Official Gazette on 15.10.2025. With this decision, the Court annulled Article 1 of Law No. 1567 on the Protection of the Value of the Turkish Currency (the “Law”) for being unconstitutional. The Court also annulled Articles 2 and Additional Article 5, as these provisions are directly linked to Article 1 and can no longer be applied.
The Court stated that bringing the annulment of Article 1 of the Law into force immediately would create a legal gap and harm the public interest. For this reason, the Court postponed the effective date of the annulment for nine months from the date of publication. The Law’s Article 2 and Additional Article 5 are both annulled immediately.
Accordingly, the annulment decision will take effect as of 15.07.2026.
| What Does the Decision Say? | Current Status |
| The Decree No. 32 on the Protection of the Value of the Turkish Currency and the related communiqués, which are based on the Law, will lose their legal basis and become inapplicable once the relevant provision of the Law is annulled. | Since Decree No. 32 and the related communiqués are still in force, the prohibition on entering into foreign currency-denominated contracts remains legally effective and continues to be applied as of today. |
The Court’s decision does not directly legalize entering into contracts in foreign currency. However, it removes the statutory legal basis that underpins the prohibition on foreign currency contracts.
Therefore:
- Until 15.07.2026, when the annulment decision enters into force, transactions must continue to be carried out in accordance with the existing legislation.
- If no new law is enacted after this date, Decree No. 32 and the related communiqués will lose their legal basis. In such case, in particular:
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- real estate sale agreements, and
- lease agreements may be concluded between the parties with the contract price and payment terms denominated in or indexed to foreign currency.
Considering the constitutional principles set out in the Court’s annulment decision, it is expected that the legislature will establish a new statutory framework by 15.07.2026.
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