Newsletter on Constitutional Court Decision on the Prohibition on Executing Contracts in Foreign Currency
By the Constitutional Court Decision dated 17.06.2025 published in the Official Gazette dated 15.10.2025 (“Decision”), below articles of the Law on the Protection of the Value of Turkish Currency numbered 1567 (“Law”) are annulled:
(i) Article 1 (to enter into force 9 months after the date of publication of the Decision); and
(ii) Accordingly, Article 2 and Additional Article 5 (with immediate effect).
In this respect, unless a similar regulation is reintroduced by the Grand National Assembly of Turkey (TBMM), the Decree numbered 32 on the Protection of the Value of the Turkish Currency and the related communiqués issued on the basis of Article 1 of the Law, which impose restrictions on contracting in foreign currency, will become null and void after 9 months. However, there is a high probability that TBMM will reintroduce a similar regulation within this period.
The justification of the decision states in summary that (i) legislative power belongs exclusively to TBMM pursuant to Article 7 of the Constitution and cannot be delegated, (ii) foreign exchange, securities and valuable mining transactions are directly related to the right to property and the freedoms of contract and enterprise, (iii) fundamental rights and freedoms can only be restricted by law, and (iv) therefore, granting the President of Turkey direct regulatory authority is contrary to the principle of non-delegation of legislative power.
If you have any questions about the above-mentioned matter, you can contact us.
Batuhan Şahmay
Buyukdere Cad. No: 193/4, 34394 Levent, Istanbul, Türkiye