Lira getting Stronger - Why?

[Eric]

You will get less at a change shop than a bank, and you will pay more for drinks at a popular holiday resort than you will in town.

[Jacqui Harvey]

I have seen more at the Change Shops than the Bank in Fethiye.

[Colwyn]

Not the lira weakening for a change, simply the pound going up to 4.11.

You sure?  The lira has fallen against the GBP, USD & EUR this past couple of days.

JF

Well £ gained 1% against $ yesterday, which helped it on its way. Although the $ had been gaining against TL for a few days it actually fell back yesterday (still at a high level though).

[JohnF]

The USD strengthened yesterday and Monday, according to Yahoo finance - up about 1.25 kurus from Friday - and currently up just over 2 kurus from Friday.

Should be a fairly interesting week, and dependent on this weekends results, an extremely interesting Monday  

JF

[Jacqui Harvey]

Phil got 4 TL this morning in Calis.

[JohnF]

Finansbank buy rate (what you get changing GBP to TL) is currently a touch under 4.09 for internet banking customers.

JF

[Colwyn]

And yesterday's Visa ATM rate was 4.068. From a strictly holidaymaker point of view I'll be happy to be get comfortably above 4. From the point of view of Turkish political economy, is the quiet downward drift of the Lira simply pre-election nerves or is there anything more specific?

[JohnF]

Think there a few factors affecting it right now. 

The Bank Asya takeover has shown how this current government can pretty much do as they want, which must send warning signs to international investors.  Exports are down by nearly 20%, tourism down by 8%, strikes in the vehicle manufacturing industry...  even the contractors building the third bridge in Istanbul are verging on bankruptcy due to FX rates (USD in this instance).

Factor in an election, probably one of the most important in recent times, and its no wonder the markets are a bit shaky over the TL.

JF

[JohnF]

Shaky indeed.  Down to just under 4.17 from 4.10 last night.

Some pollsters have been predicting that no party will gain an overall majority, this was supposed to help the lira. However, it appears that everyone is now expecting the usual cheating to have an effect, so much so that the Turkish Bar Association have set up an "anti corruption" telephone helpline.  Good intentions, but wont have much effect methinks.

Tonne of coal or a set of pots and pans anyone?

JF

[yabanci]

The lira's woes were not helped by yesterdays inflation figures which rose from 7.9% in April to 8.1% last month.