Turkish Lira continues to slide

[usedbustickets]

Despite a half percent increase in the interest rate by the Turkish Central bank yesterday, the Turkish lira continues to slide, and finished today at the TEB bank rate of 3.10TL to the £.  Great news if you are over for a holiday, and could be good for people who have savings here as the interest rates will have to start to rise - significantly - if something is not done by the central bank/government very soon.  Having said that this could lead to further slow down in the economy, and higher inflation .  Not what Erodogan wants, I'm sure, in the next year or so as he runs up to an election and constitutional vote.

Let's see who he blames (again) this time,park  protestors, yanks, Germans or perhaps the Israelis again

[GordonA]

It's probably my frickin' fault Monsieur Tickets, I always get the blame for everything !!   
We come over in 10 days, looking good for us , I s'pose !! 

[usedbustickets]

It certainly does look good for you Gordon.  Careful  what you splash the extra cash on, although.you should look out for the local warm prawn cocktail, strongly recommended by Lance.  Have a great time

[usedbustickets]

Reuters are saying that the central bank rate will need to be - in the short term - over 10% to deal with this currency issue.  Short term should be read in terms of months and not days.. Watch this space, and also Erdoan response, which could make matters worse for Turkey

[Colwyn]

How much of a mess is the Turkish economy? Here is a very gloomy prognosis from a column in The Wall Street Journal.


Analysts say that with a currency in free fall, rising borrowing costs, and political challenges including mounting calls for intervention in Syria, Ankara will struggle to meet its 4% economic growth target in 2013.


The favoured solution of this columnist is that the Turkish Central Bank should give out a clear message and, presumably, back this with a significantly higher interest rate. Given Erdogan's strongly expressed opinion on interest (as usury) this should be interesting to follow. This morning the lira continued to lose ground - at one point nearly 2% against the US dollar.

http://blogs.wsj.com/moneybeat/2013/08/26/stagflation-fears-stalk-turkey/


Follow up in today's edition:

The Turkish lira slumped to yet another record low against the euro and dollar Tuesday as the country's central bank governor ruled out further rate hikes. The lira weakened over 1% against both the dollar and euro following the governor's speech. The dollar surged past 2.03 lira for the first time, while the euro rose to a record high of 2.7163 lira.
http://online.wsj.com/article/SB10001424127887323906804579038344153229018.html

[Scunner]

Bad day so far for the lira - hit 3.1533 earlier today, now at 3.1446, up 1.1% in less than one day.

[Scott and Lisa]

at these rates my money will be worth nothing in England, therefore forcing me to live in turkey...damn!

looks like id better invest some more!!!

[usedbustickets]

The governor of the central bank spoke on TV this morning and the more he spoke the more the stock market and the Lira fell.......

[teetee]

Does this directly affect the price of Efes though?     

[Colwyn]

Everything affects the price of Efes - don't forget your Chaos Theory, and butterfly wingbeats in Central Asia causing hurricanes in the Caribbean.


I am expecting Erdogan to announce soon that this is a conspiracy by enemies of Turkey and that he irrefutable evidence of a concoction of different groups - Lufthansa, BBC, CIA, Israeli agents, Kemalists, Egyptian generals, Turkish generals, CHP and others - are using telekinesis to manipulate the money markets. This would be in line with the barmy things he has been stating publicly of the last six months. Not new that he should think these thoughts: just new that he has been expressing them so openly.