Turkey’s Statutory Interest Rate Is Now Linked To The Rediscount Rate

A significant change to Türkiye’s statutory interest regime was introduced by Law No. 7589, published in the Official Gazette No. 33326 on July 31, 2026. The fixed-rate approach under Article 1 of the Law on Statutory Interest and Default Interest has been abandoned. For obligations that bear interest but for which the applicable rate has not been contractually agreed, the annual interest rate will now be linked to the rediscount rate applied by the Central Bank of the Republic of Türkiye to short-term lending transactions. Under the new system, the statutory interest rate may change in response to economic conditions, and a different rate may apply during the second half of the same year if certain statutory conditions are met. Consequently, it will not always be possible to calculate interest on long-term receivables by applying a single rate.

The amendment follows the Constitutional Court’s annulment decision dated July 22, 2025, numbered E. 2024/24, K. 2025/164. The Court held that, in respect of non-contractual obligations, the absence of an effective mechanism capable of compensating for the loss in the value of money despite the accrual of interest in cases of delayed payment was incompatible with the right to property. By linking the statutory interest rate to an indicator that more closely reflects market conditions, the new legislation aims to establish a more current balance between creditors and debtors. This article examines the former system, the calculation of the new rate, the scope of the amendment, and the practical issues that may arise when calculating interest.

Why Was the Fixed Statutory Interest Regime Changed?

Before the amendment, Article 1 of Law No. 3095 provided for a fixed statutory interest rate where interest was payable but the applicable rate had not been contractually agreed. This framework did not contain a calculation mechanism that automatically adjusted the interest rate in response to economic developments or changes in the purchasing power of money. Particularly during periods of high inflation, the interest accruing as a result of delayed payment could fail to compensate for the actual loss in the value of the receivable. As a result, the debtor was affected only to a limited extent by the economic consequences of the delay, while the creditor could not be restored to the same financial position despite ultimately recovering the receivable.

In its decision dated July 22, 2025, numbered E. 2024/24, K. 2025/164, the Constitutional Court annulled Article 1 of Law No. 3095 insofar as it applied to non-contractual obligations. The Court concluded that the mere payment of interest was insufficient and that the absence of both a mechanism capable of compensating for monetary depreciation and an effective legal remedy capable of preventing the receivable from losing value violated the right to property. The annulment was scheduled to take effect on September 1, 2026. By adopting the new system before that date, the legislature prevented the emergence of a potential legal gap. The variable model based on the rediscount rate is intended to enable statutory interest to adapt more rapidly to economic conditions and to establish a more current balance between the interests of creditors and debtors.

How Will the New Statutory Interest Rate Be Calculated?

Under the new legislation, the annual statutory interest rate will be equal to 80% of the rediscount rate applied by the Central Bank of the Republic of Türkiye to short-term lending transactions on December 31 of the preceding year. This method makes the statutory interest rate applicable at the beginning of each calendar year dependent on prevailing economic conditions. Where the parties have not contractually agreed on an interest rate but interest is payable by operation of law, the rate calculated using this method will apply instead of a fixed rate. The calculation must be based on 80% of the rediscount rate, rather than the full rate.

The Law also takes into account the possibility of significant changes in economic conditions during the year. If the rediscount rate applied by the Central Bank on June 30 differs by five percentage points or more from the rate applied on December 31 of the preceding year, 80% of the June 30 rate will apply during the second half of the year. The relevant threshold is the difference in percentage points between the two rediscount rates, rather than the proportional percentage change. If the difference is less than five percentage points, the statutory interest rate determined at the beginning of the year will continue to apply during the second half of that year.

This system makes it possible for two different statutory interest rates to apply to the same receivable within a single calendar year. If a new rate becomes applicable as of July 1 while interest continues to accrue, the calculation must be divided into the relevant periods. It should nevertheless be noted that the amendment does not automatically change the date from which interest begins to accrue; the new legislation primarily determines the applicable annual rate. The date on which interest begins to accrue must be established separately by reference to the legal nature of the obligation, the rules governing default, and any applicable special provisions.

Which Obligations Are Covered by the Amendment?

The new legislation applies to obligations that bear interest under the Turkish Code of Obligations or the Turkish Commercial Code where the applicable interest rate has not been contractually agreed. The amendment is therefore not limited to claims arising from tort or unjust enrichment. The new statutory interest rate will also apply to contractual obligations where interest is payable but the parties have not agreed on the rate. Conversely, a contractual interest rate validly agreed by the parties will not, as a rule, be automatically altered by the new system. Where special legislation prescribes a different interest rate, the relevant special provision must be assessed separately. In addition, the interest rate requested by a claimant during debt collection in Turkey may be binding on the parties.

Statutory interest must also be distinguished from default interest. Statutory interest applies where an obligation to pay interest exists but the applicable rate has not been determined, whereas default interest arises from the failure to pay a monetary obligation when due. Nevertheless, because Article 2 of Law No. 3095 links the default interest rate to the rate prescribed under Article 1 unless otherwise agreed by contract, the new rediscount-based rate will also indirectly affect the calculation of default interest. The legal nature of each case must be assessed separately with respect to the higher default interest rate that may apply to commercial transactions, foreign-currency obligations, and interest rates agreed by the parties.

Effective Date and Transitional Period

Article 10 of Law No. 7589, which concerns statutory interest, entered into force on July 31, 2026, pursuant to the Law’s effective-date provision. The legislation does not contain a separate transitional provision governing the amendment to Article 1 of Law No. 3095. Accordingly, the new rate will, as a rule, apply to periods during which interest accrues after the amendment’s effective date. The fact that the underlying obligation, lawsuit, or enforcement proceeding arose before that date does not, by itself, preclude application of the new system. The determining factor is the period for which interest is being calculated.

Interest accrued before July 31, 2026, will not be recalculated retroactively using the new rediscount-based rate. The period preceding the effective date must be calculated using the rate applicable at that time, while the subsequent period must be calculated under the new provision. Moreover, if the June 30 rediscount rate changes to the extent specified by the Law, the interest calculation for the second half of the year may need to be divided into additional periods. This structure will make it more difficult to calculate interest by applying a single rate, particularly in long-running litigation and enforcement proceedings. The date on which the receivable arose, the type of interest claimed, and the rate applicable during each period will therefore need to be examined separately.

Although the new rediscount-based system is intended to make statutory interest more responsive to economic conditions, it has also made interest calculations more technical. Contractual interest, statutory interest, and default interest must be distinguished from one another, and the calculation for each period must be based on the applicable legal grounds and rate. To determine how the amendment affects a particular receivable or pending proceeding, the legal nature of the obligation and the relevant interest periods should be assessed together.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.