Exchange Rate

#41
This rate has gone crazy, where will it end? I hope to God I never have to change my savings back to pounds, not at this rate anyway. With tourism down I feel sorry for the locals.
 
#42
This is a fair view of why things are the way they are with the lira, Big Finance Capital ultimately calls the tune and while governments might want one thing, the Big Finace Guys ultimately make the call.
An Inert Central Bank

While the U.S. Federal Reserve is in a tightening cycle, the Turkish central bank is dragging its feet. With the economy contracting for the first time in seven years in the most-recent data, the central bank, led by governor Murat Cetinkaya, is under pressure from politicians including President Recep Tayyip Erdogan to support growth. They’ve made statements the traders are reading as a commitment not to raise rates, setting up the lira as an easy short.

As developed-market yields rise, investors are demanding relatively higher returns to hold lira-denominated assets. Yet rather than raising rates to bolster the currency, the central bank slashed its two main lending rates by total of 250 basis points since March before raising its overnight lending rate by 25 basis points and the one-week repurchase rate by 50 points. Those were the only rate increases in three years during a period in which the lira depreciated on average 15 percent a year. Last month the bank held rates steady even as the Fed’s rate increase added to pressure on the currency.
 
#43
Inflation
The currency’s weakness is fueling inflation. Consumer price growth accelerated to 8.3 percent last month, more than 3 percentage points above the central bank’s target, heading for the sixth year in a row that it’s been missed. UniCredit strategists expect inflation to climb to as high as 12 percent this year and are recommending investors hold off on buying local currency bonds.
That’s not to mention Turkey’s indebted corporations, which have borrowed heavily in hard currency and now face ballooning foreign-exchange liabilities. The difference between the corporate sector’s foreign liabilities and assets climbed to a record $213 billion as of September. That's $213,000,000,000!!!
As the lira weakens those companies will clamor to buy dollars to service their debts -- perhaps one reason why a central bank intervention Tuesday that lowered banks’ required foreign-currency reserve ratios hasn’t sparked a recovery in the lira. In an interview with Bloomberg on Tuesday, Economy Minister Nihat Zeybekçi said the country is considering tighter restrictions on companies’ foreign borrowings.
 
#44
This rate has gone crazy, where will it end? I hope to God I never have to change my savings back to pounds, not at this rate anyway. With tourism down I feel sorry for the locals.
Anthony the pieces I posted should help explain that it is not going to end anytime soon, well not at least until the banks increase interest rates and I do not see them doing that in any great movement upwards anytime soon. As the article says inflation is running at 8% -and likely to hit 12% this, year it is going to be very painful for local savers and Turkish people if rates were to increase anytime soon. It makes interest on Turkish savings a concern too, especially if inflation hits 12%.
 
#50
As a property owner and among others who have invested our savings in Turkey i cringe when people equate everything that is happening in Turkey and the collapse of the Lira to the price of an effe's !!!
Have you any idea the pain for saver and locals and the inflation coming for those of us who call Turkey home.
Grow up
 
#51
Corrrect Thomas...lobbed near 20k into my Finnansbank acc in Sept for a twelve month rate at 12.25%, the Lira then was around 3.8 so, my yeild is dramitically coming down.
 
#53
Well bit of a pull back on right now. Euro nearly hit 4.18 early this am. Now nearly back to 4.00. Lots of speeches - people calling names etc. The oracles are forecasting further wows for TRY. I think the euro floor maybe 4.50 but I'm only reacting to the hysteria.

B

BTW don't be in a hurry back the fecken snow is starting here now ;-(
 
#54
Corrrect Thomas...lobbed near 20k into my Finnansbank acc in Sept for a twelve month rate at 12.25%, the Lira then was around 3.8 so, my yeild is dramitically coming down.
While it is no compensation to hear Hooperman, you are not alone, there are a lot of us who changed FX when the lira seemed weak, got what we thought were great rates but with inflation likely to hit 12% this year and the collapse of the lira I am afraid we should be happy to break even or loose only a little into the future. Now I am beginning to think none of this will calm down until after the referendum and of course with dollars we have Trump and Pounds we have Brexit, both of those will have their own effects on FX moves this year and next....aghhhhh
 
#57
I own a home in kus but unfortunately can't live there. We live in Britain and are low paid and have to work very hard to save to come to turkey. It is awful for the Turkish but we plough money into the economy when we come over. We like an efes and like to know if we are getting it a bit cheaper sometimes, as we are not rich. We love this country but because of low pay and now I've got to work until I'm 67, the chance of us living over there are very slim. So yes it is nice to get a cheap efes sometimes
 
#58
For beer info pop over here.
http://www.turkishliving.com/forums/dalaman-forum/68357-doubling-price-efes-9.html
You might ask them for the BIM price of beer to give a better focus. My local Kush pub was always looking to buy our duty free spirits as local price was nuts. We like Baileys with ice and always bring our own in for nice evenings with locals on our terrace. We are not alcos but it does make for an interesting conversation topic (the Baileys). The German airports on 2 hop flights are a great spot to pick up super deals with odd label brands. Bit off topic ;-)
 
#59
Right back on topic Euro above 4.05 today and pointing upward. I think we spend our set holiday budget no matter what the rate is. This year I think we can get a bit more done - like decorating etc. I suppose you can call it investing in local economy but amount in euro is still the same. One bonus for us was we had to pay a council building fine - levied when rate at 1.6 paid @ 3.2 - took the sting out of it.
 
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