Türkiye's banking regulator on Tuesday announced it was scrapping the application of inflation accounting for banks, financial leasing, factoring, financing, savings financing and asset management companies.

The decision was taken at a meeting last week, the Banking Regulation and Supervision Agency (BDDK) said in a statement.

The BDDK had previously decided that financial institutions would transition to inflation-adjusted accounting, but later said the practice would not be implemented in 2025.

Adjusting balance sheets to take inflation into account would lead to reduced profits and, as a result, lower taxes.