2.2.4. Export Rediscount Credits

In the scope of Article 45 of the Central Bank Law, rediscount credits are extended to exporters and foreign exchange earning firms in TL with a maturity up to 240 days through the Export Credit Bank of Turkey (Türk Eximbank) and commercial banks by the acceptance of foreign exchange bills for rediscount, whereas repayments to the CBRT are made in foreign exchange.

Taking into account the contribution of rediscount credits to the decrease in the current account deficit and the increase in the CBRT’s foreign exchange reserves, the credit limit was increased by USD 2 billion to USD 17 billion on 23 January 2015.

Moreover, with the changes made in rediscount credits’ regulations on 23 January 2015;

• In addition to exports, foreign exchange earning services (tourism services, health services, consultancy, software development and engineering services, transportation services and repair and maintenance services) were also made eligible to use rediscount credits.
• Türk Eximbank and domestic commercial banks were allowed to intermediate the extension of rediscount credits for financing foreign exchange earning services.
• Domestic commercial banks were allowed to intermediate pre-shipment export rediscount credits in addition to post-shipment export rediscount credits.
• In addition to post-shipment export receivables that were transferred to factoring firms, foreign exchange earning services and pre-shipment exports receivables were also made subject to the rediscount credit facility via Türk Eximbank and domestic commercial banks.

With the changes made on 5 June 2015:

• The entire credit limit per company - which is USD 300 million for foreign trade capital companies and USD 250 million for other companies - can be used for credits with a maturity up to 120 days and up to 60 percent of the limit could be used for credits with a maturity of 121-240 days.
• Bursa, Gaziantep, Denizli, Adana, Kayseri, Trabzon and Antalya branches were also approved to intermediate the extension of rediscount credits incrementally, starting with the Gaziantep branch.
• The commitment fulfillment period for the export of goods and services was set as 24 months and the additional 6-month period introduced to firms that fulfill 50 percent of their export commitment within the 12-month period was abolished.

Rediscount credit extensions, which were USD 15.3 billion in 2014, reached USD 14.5 billion as of 31 December 2015, with an outstanding balance of USD 7.9 billion.

In this context, rediscount credits contributed USD 15.2 billion to the Central Bank’s net foreign exchange reserves in 2015.