Defense Sector Firms Now Permitted to Enter Foreign Currency Contracts, Latest Update
The Ministry of Treasury and Finance has announced the enforcement of the amended Communiqué on the Decision No. 32 on the Protection of Turkish Currency, as published in the Official Gazette.
According to the Ministry, the defense industry sector is primarily reliant on foreign currency transactions. However, subcontractor companies are currently prohibited from entering into contracts denominated in foreign currency under existing exchange legislation.
Due to the risks associated with fluctuating exchange rates, the Ministry has advised that subcontractor companies in the defense industry sector consider pricing their contracts in Turkish currency to avoid incurring high costs in tenders. Alternatively, companies may opt for indexed contracts in foreign currency or foreign currency indexed contracts to mitigate exchange rate risks.
The competence of subcontractor companies in the defense industry sector will be assessed and certified by the Defense Industry Presidency under the Industrial Competence Evaluation and Support Program.
These measures aim to enhance the competitiveness of subcontractor companies in the defense industry sector and ensure a stable and viable business environment amidst the challenges posed by fluctuating exchange rates.
