New Principles for Determining the Statutory Interest Rate in Türkiye

With the enactment of the Law No. 7589 on Amendments to Certain Laws for the Effective and Efficient Functioning of the Judiciary (the “Law No. 7589”), published in the Official Gazette No. 33326 dated July 31, 2026, the statutory interest regime has undergone a significant reform. The previous framework, under which the statutory interest rate was determined by reference to a fixed rate, has been replaced with a variable mechanism linked to the rediscount rate applied by the Central Bank of the Republic of Türkiye (the “CBRT”).

• Previous Regime

Under the former Article 1 of the Law No. 3095 on Statutory Interest and Default Interest (the “Law No. 3095”), the President was authorized to determine the applicable statutory interest rate on a monthly basis. Pursuant to this authority, Presidential Decree No. 8485 dated May 20, 2024 set the statutory interest rate at 24% per annum, effective as of June 1, 2024.

In its decision dated July 22, 2025, numbered E. 2024/24 and K. 2025/164, the Constitutional Court reviewed Article 1 of the Law No. 3095 in the context of non-contractual obligations and held the existing framework unconstitutional in so far as it applied to such obligations. In particular, the Constitutional Court emphasized the absence of an effective and foreseeable mechanism capable of compensating for the loss in the real value of a receivable over time. The Constitutional Court concluded that a statutory interest regime based on a fixed rate was not, in all circumstances, sufficient to compensate creditors for the economic loss arising from delayed recovery of their receivables.

Although the annulment decision was scheduled to take effect on September 1, 2026, the legislature introduced a new statutory interest regime through the Law No. 7589 before that date.

• How Does the New Regime Work?

Pursuant to Article 1 of the Law No. 3095, as amended by the Law No. 7589, where interest is payable under under the applicable legislation and the relevant interest rate has not been contractually agreed, the statutory interest rate will be calculated at 80% of the rediscount rate applied by the CBRT to short-term lending transactions as of December 31 of the preceding year. Accordingly, the statutory interest rate will no longer be prescribed as a fixed percentage under the legislation. Instead, it will operate as a variable rate linked to the CBRT rediscount rate. The amended Article 1 further provides for a mid-year adjustment mechanism. If the rediscount rate applicable on June 30 differs by five percentage points or more from the rate applicable on December 31 of the preceding year, 80% of the rediscount rate applicable on June 30 will apply during the second half of that year.

For example, assume that the rediscount rate applied by the CBRT as of December 31 of the preceding year is 40%. In that case, the statutory interest rate applicable for the first half of the year would be 32%, corresponding to 80% of the 40% rediscount rate.

If the rediscount rate increases to 46% as of June 30, the difference from the 40% rate applicable on December 31 would be six percentage points, thereby exceeding the five percentage point threshold. Accordingly, the statutory interest rate applicable for the second half of the year would be 36.8%, corresponding to 80% of the 46% rediscount rate. By contrast, if the rediscount rate increases to 43% as of June 30, the difference would be only three percentage points. As the five percentage point threshold would not be met, the statutory interest rate of 32% determined at the beginning of the year would continue to apply throughout the second half of the year.

	Before July 31, 2026	From July 31, 2026 Onwards
Nature of the Rate	Fixed	Variable
Basis for Determination	Presidential Decree	80% of the CBRT rediscount rate
Frequency of Adjustment	Subject to the adoption of a new Presidential Decree	Annually, with a mid-year adjustment if the rediscount rate as of June 30 differs by at least 5 percentage points
Applicable Rate for 2026	24%	31% (38.75% × 80%)

• Application to Pending Proceedings

No specific transitional provision has been introduced in respect of the amendment to Article 1 of the Law No. 3095. Pursuant to the relevant effective date provision, the amendment entered into force on July 31, 2026. Accordingly, where interest began to accrue before July 31, 2026 and continues to accrue thereafter, the interest calculation should be divided into the relevant periods. As a general rule, interest accrued prior to July 31, 2026 should be calculated at the statutory interest rate of 24% applicable during that period, while interest accruing from July 31, 2026 onwards should be calculated at the new rate of 31%.

Therefore, in pending court proceedings or ongoing enforcement proceedings where interest began to accrue before July 31, 2026, the applicable statutory interest rate should be determined separately for each relevant period, rather than applying a single rate to the entire accrual period.

This note has been prepared solely for general information purposes in light of the legislative developments as of July 31, 2026 and does not constitute legal advice in respect of any specific matter or circumstances. Vardar Şanlı Law Firm accepts no liability arising from or in connection with any reliance placed on the information contained herein.