Turkey Bans Use of Foreign Currency in Property Market
A decree announcing that contracts for sales, rent, and leasing must in future be made in lira has been issued by President Recep Tayyip Erdogan.
All current agreements in the property sector made in foreign currencies must be changed within 30 days.
Previously, Mr. Erdogan urged Turks to sell their dollars and euros. The lira has lost almost a third of its value against the dollar since January.
Nobody should carry out business in foreign currency apart from exporters and importers, Mr. Erdogan said and also criticised Turkey's central bank, accusing it of failing to control inflation and urging it to cut interest rates just hours ahead of its announcement that it was raising rates to 24%.
"As of today I have not seen the central bank fix inflation rates as they promised," Mr. Erdogan said.
"Interest rates are the cause, inflation is the result. If you say 'inflation is cause, the rate is the result', you do not know this business, friend," he added.
Since most property sold or rented in foreign currency tends to be either commercial or high-end, the new decree received limited attention from people in Turkey.
It is expected that a number of businesses will be affected by the changes and many retailers have previously criticised the dollar-based rent policy in shopping centres, where it has been blamed for the bankruptcy of at least one major company.
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