Client Alert:

TURKEY INCREASES THE STATUTORY ANNUAL LEGAL INTEREST RATE FROM 9% TO 24%

TURKEY INCREASES THE STATUTORY ANNUAL LEGAL INTEREST RATE FROM 9% TO 24%

Pursuant to the Presidential Decree published in the Official Gazette on 21 May 2024, the legal interest rate received a big hike from 9% to 24% effective from 1 June 2024 (“the Effective Date”).

As a matter of Turkish Law, default interest arising from a debt under the Code of Obligations or the Commercial Code, is subject to the legal interest rate unless (i) determined otherwise in a contract or (ii) there is no commercial transaction. The previous rate at 9% per annum had remained unchanged since 1 January 2006 and was considered to be outdated under the current fiscal conditions of the country.

The previous rate of 9% will continue to apply until the Effective Date and the new rate shall be taken into consideration for the calculations thereafter.

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