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Before 1980, Turkey followed an economic policy based on the substitution of imports, and instead of importing it was aimed to manufacture those goods in the country to meet domestic demand. Newly established industrial branches were protected for long periods of time by customs tariffs and other taxes equally effective. A comprehensive Stability Program with the objective of providing substantial economic reforms was prepared and applied as of 24 January 1980. Thus, Turkey has abandoned the industrialization model based on the substitution of imports and adopted an industrialization model concentrating on, and giving priority to, exports. |
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Reorganizations, especially in the fields of foreign exchange and foreign trade, were made for opening the economy to foreign markets and for sustaining the industrialization based on exports. Policies were developed to follow a realistic exchange rate policy for the Turkish Lira and to have the market mechanisms determine the exchange rates. As of May 1981, foreign currency exchange rates started to be determined daily by the Turkish Central Bank by taking into consideration the changes in domestic and foreign price levels, the balance of payments and the developments on the international foreign currency markets. The exchange rates started to be determined on the foreign currency market after August 1988 and the gold market was opened by the Central Bank in April 1989.
The principles of the foreign currency regime in Turkey and the changes it has brought can be summarized as follows:
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- People living in Turkey are free to have foreign currency in their possession; to buy foreign currency without limitation from banks, authorized institutions and private finance institutions; to transfer foreign currency abroad; and to open foreign currency deposit accounts at banks, - to use the foreign currency they obtained within the context of invisible procedures such as contracting, tourism, transportation, banking and insurance.
- to obtain foreign credit as operating credit for their business financing needs.
- to transfer capital abroad for commercial activities and investments in foreign countries. The only restriction is for the capital transfers exceeding certain limits which are subject to permission from either the Undersecretariat of the Treasury or the Council of Ministers.
- to export securities and sell them abroad.
- to send abroad guarantees and bonds in foreign currency | |
