Ankara keeps currency losses off balance sheets as the FX gap widens

The noise is in the date, the signal in the timing

Official Gazette No. 33396 of 10 October 2026 carried a short communiqué from the Trade Ministry. According to Alomaliye, it changed the date in the provisional article of a 2018 communiqué on Article 376 of the Turkish Commercial Code from 1/1/2027 to 1/1/2028. The news flow treated it as a one-line date change. That is the noise. The amendment looks technical, but the assumption behind it is not.

Article 376 requires the board of a company that has lost half or two-thirds of its capital to convene the general assembly and restore the capital. An insolvent company must notify the court. The exemption lets companies ignore the full FX loss on unpaid foreign-currency debt in this test. Half of the rent, depreciation and staff costs accrued in 2020–2021 can also be left out. Use of the exemption is optional and disclosed in the footnotes.

The extension came 12 months early

According to a 10 December 2025 report in Karar, the previous extension moved the cut-off to 1 January 2027. That extension was made on 10 December 2025. This time the ministry acted roughly 12 months before the new deadline. The sequence suggests Ankara expects currency pressure on balance sheets to persist throughout 2027.

A second deferral came the same day. Bloomberg HT reports that EPDK deferred balancing-market advance payments by the Akedaş, Dicle, Fırat and Toroslar distributors, and by the incumbent suppliers in those regions, interest-free until 31 December 2027. According to YatırımX, the same decision was taken on 28 October 2025 to run until end-2026, citing the earthquakes of 6 February 2023. Some 44 months have passed since the earthquakes; the deferral is turning into a permanent source of funding.

The fix for the fund crisis follows the same logic. A bill submitted to parliament on 9 October would revalue principal in 131 liquidating funds by the average of CPI and PPI. The government says no public money will be used. What the three cases share is that the question of whose balance sheet takes the loss is being moved from today to tomorrow.

The constraint is the FX gap

Corporate balance sheets explain why the deferral has come now. CBRT data cited by Bloomberg HT show non-financial companies' net FX short position rising by $2.3 billion in June to $205.8 billion. The main driver was a $3.6 billion increase in derivative liabilities. In the same month, FX deposits at domestic banks fell by $1.6 billion.

The more sensitive gauge is the short end. Data cited by Uzmanpara show companies' short-term net FX position still in surplus by $6.6 billion in June. But that surplus shrank by $3.2 billion in a single month. Short-term FX assets stand at $150.1 billion against liabilities of $143.5 billion. If the lira weakens while this buffer thins, companies will run out of FX assets to cover the foreign-currency debt they must repay within a year.

The currency side is clear. Trading Economics put USD/TRY at 49.27 on 9 October, and the lira has lost about 17.8% over the past 12 months. Without the exemption, the translation loss on unpaid FX debt from that depreciation would be deducted from equity. There is no official data on how many companies use the exemption, which makes the size of the constraint hard to measure.

Where the hidden loss surfaces

The exemption protects the balance sheet, not cash flow. Data cited on 14 August by CHP MP Ömer Fethi Gürer show 3,529 concordat rulings in the first seven months of 2026, of which 1,146 were rejections and 171 bankruptcies. The figures could not be verified against an official database. Ekonomi Gazetesi, drawing on Konkordatotakip data, reported that bankruptcy rulings reached 141 in the first eight months of 2025, more than in all of 2024.

Capital markets show traces too. According to Türkiye Today, Tera Yatırım Bankası failed to repay at maturity a roughly 6.05 billion lira commercial paper issued on 6 April with a 182-day tenor. It is a concrete case of a loss leaving the balance-sheet footnotes and landing on the payment calendar in the corporate debt market.

Reserves are the collateral for the deferral

This picture ties the MPC's hands. Bloomberg HT reports that Goldman Sachs, in a 7 October note, said it does not expect a cut on 22 October. The bank stressed that reserve losses have accelerated since the effective 300-basis-point cut. CBRT data for 8 October show net reserves excluding swaps down to $37.9 billion. In a system that defers FX losses off the balance sheet, a jump in the lira means the deferred loss is recognised in one go. That strengthens the CBRT's inclination to hold the currency steady with reserves.

Domestic benchmark yields show the market does not expect rapid easing either. Bloomberg HT's benchmark screen on 11 October showed the 2-year yield at 39.59% and the 10-year at 35.52%. The screen is not updated at weekends, so we treat these as 9 October closes. The 2-year yield sits above the 37% policy rate.

Our thesis is that the deferrals are not a crisis but a maturity extension tied to currency stability. The loss does not disappear; only its recognition is postponed. The thesis would be refuted if CBRT data for July and August showed companies' net FX short position falling below $195 billion and the short-term surplus recovering above $9 billion.