MediumIV Macro Policy & Sovereign Debt10 October 2026, Saturday
Türkiye extends FX-loss exemption in capital-loss tests for another year
Under a Trade Ministry communiqué published in Official Gazette No. 33396 on 10 October 2026, companies may disregard currency losses on unpaid foreign-currency debt when testing for capital loss and balance-sheet insolvency until 1 January 2028. The previous cut-off was 1 January 2027.
The amendment changes the date in provisional Article 1 of the 15 September 2018 communiqué on Article 376 of the Turkish Commercial Code from 1/1/2027 to 1/1/2028. According to Alomaliye, companies may exclude two items from the calculation. One is the full currency loss on foreign-currency liabilities not yet paid. The other is half of the combined rent, depreciation and staff costs accrued in 2020–2021. Use of the facility is optional and must be disclosed in the notes if applied.
The relief is extended by a year towards the end of each year. Karar reported on 10 December 2025 that the previous extension had moved the cut-off to 1 January 2027; this time the extension came in October, about 12 months before expiry. Article 376 obliges the board of a company that has lost half or two-thirds of its capital to convene the general assembly and restore capital. An over-indebted company must notify the court.
The timing should be read alongside currency and corporate data. According to Trading Economics, the dollar stood at 49.27 lira on 9 October; the lira has lost about 17.8% against the dollar over the past 12 months. CBRT data show the net foreign-currency position of non-financial firms at a deficit of $205.8 billion in June. Counting currency losses could push some companies with heavy FX debt below the Article 376 threshold on paper. There are no official data on how many companies use the facility.
Talay assessment
Bottom line
The extension keeps FX-indebted companies' currency losses off their balance sheets for another year and defers the capital-restoration pressure of Article 376. This is not new support but the renewal of a facility based on a 2018 communiqué, about 12 months ahead of expiry. It signals that Ankara assumes the lira will stay weak in 2027 and that corporate balance sheets could not absorb it. The loss does not disappear; only its recognition is deferred.
Likely effects
- Corporate balance sheetsUncertain1–6 months
While currency losses stay off the books, FX-indebted companies escape mandatory general assemblies and capital increases for another year; the losses pile up in the notes.
- Credit risk assessmentNegative1–6 months
Banks and bondholders must look to the notes rather than reported equity; as transparency falls, corporate borrowing premiums may rise.
- Currency policyNegative6 months+
Renewing the exemption every year means any sharp lira move hits corporate balance sheets again, reinforcing the CBRT's tendency to hold the currency with reserves.
Possibilities, ranked
- 1Relief continues, losses accumulate60%
The exemption is extended again at the end of 2027, the lira depreciates gradually, and companies carry on without raising capital.
Watch: The net FX position in the CBRT's monthly data on firms' foreign-currency assets and liabilities
- 2Lira shock strains balance sheets25%
The dollar climbs quickly against the lira, concordat and bankruptcy filings rise among firms with stressed cash flow, and the exemption can no longer mask the losses.
Watch: Monthly concordat and bankruptcy rulings and the 50-lira mark for USD/TRY
- 3Relief expires15%
Currency stability becomes entrenched, the ministry does not extend the facility at the end of 2027, and companies recognise their currency losses.
Watch: An Article 376 communiqué in the Official Gazette in December 2027
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- USD/TRY (9 Oct)▼ 49.27
- Firms' net FX deficit (June)▼ $205.8 billion
- New exemption cut-off▲ 1 January 2028
Historical context
USD/TRY, last 6 months
- 116/09 · BIST 100 fell 5.54% to 13,122.58 points as 17 stocks closed at the floor price
- 217/09 · Diesel passed 100 lira a litre in Türkiye for the first time: a third consecutive increase
- 321/09 · Central government debt stock rose by 422.5 billion lira in August to 15.89 trillion lira; foreign-currency share at 51%
- 421/09 · The dollar reaches an all-time high of 48.82 lira as the BIST 100 falls 1.92% at midday to 13,028.71 points
- 521/09 · The 72,825 dwt tanker LR Stephanie is struck in Hormuz and two seafarers wounded; weekend transits fall to 17 ships
- 621/09 · Export producer prices rose 32.60% year on year in August, with the increase in energy reaching 106.24%
- 723/09 · Dollar hits new high of 48.84 lira on 23 September; calculations show CBRT reserves fell $13.9 billion in 4 weeks to $174.5 billion
- 824/09 · BIST 100 falls 2.74% to 12,888 points on 24 September as the 2-year lira bond yield climbs to 37.09%: Fed and oil pressure hit Turkish assets
- 924/09 · CBRT official data: in the week of 18 September gross reserves fell by 4.3 billion dollars to 174.4 billion, net reserves by 6.4 billion to 55.8 billion
- 1025/09 · Türkiye's CDS tops 250 for the first time since 27 May: as the $18 billion liquidation of 131 funds proceeds, Erdoğan says no systemic risk; 45 arrested
- 1126/09 · Yılmaz puts the war's impact on inflation at 7 points, citing CBRT calculations; 10-year yield ended the week higher at 32.77% on 25 September
- 1230/09 · BIST 100 enters a bear market after losing 5% in two days
Sources
- Bloomberg HT — Relief for companies with capital loss or over-indebtedness extended
- Alomaliye — Deadline extended in capital-loss calculation
- Karar — Companies' FX-loss relief extended to 1 January 2027
- Trading Economics — Turkish lira
- Bloomberg HT — Real-sector net FX deficit reached $206 billion in June