Lira getting Stronger - Why?

[JohnF]

You could say its showing signs of improvement, but not sure if its on the path to recovery as yet.

JF

[Colwyn]

It is not possible to know for certain what is going on inside the Central Bank but there is some speculation that it is making access to funds more expensive for commercial banks without actually changing the main headline rate. This chokes off the money supply without actually disobeying "The Tall One". Unfortunately it will have the same result of increasing borrowing costs for companies wanting to invest - which is the opposite of what RTE wants. Will they get away with this ingenious trick? Is it more than a short-term fix? Tune into the soap opera again tomorrow!

[JohnF]

Its not speculation, they started it in middle of January, if memory serves me correctly.  There's been a couple of mentions of this in the media, selling to banks at 10% instead of 8%.  I'll try and post a couple of links tomorrow.

JF

[davybill]

Yes the Lira doing better than its done for a while, considering all the problems they have had
with the coup and bombs in Istanbul.

[patrice]

4.58 tl to the pound today

[jackstee]

4.5 yesterday at Dikmens

[JohnF]

Been a good few weeks for the lira, strengthened quite a bit against both the dollar and the pound.  Sitting at 4.56 to the quid, up from 4.89 four weeks ago.

Are we seeing an upturn in confidence regarding the lira, or is this a false dawn where it'll all come tumbling down on the 17th April?

JF

[Colwyn]

February has been a good month for the Lira. It improved against the dollar from 3.8 at the start to 3.6 towards the end of the month. This follows an extraordinarily bad start to the year. So it is not yet clear whether this a sign of a better climate for the lira or merely a correction to the wild fall of the first week in January

[JohnF]

Nothing like a jump in the inflation rate to bring it all tumbling down again... 4.55 against the pound from 4.44 and 3.78 against the dollar from 3.58.

The inflation rate hit 10.13% in February, exceeding even independent forecasters predictions (9.8%), and is now making the forecast for March (10.34) look pretty conservative.  This the highest its been since 2012. 

Lets see what rabbit the government pull out of a hat to slow things down before 16th April.

JF

[Colwyn]

Those of us who have been following the story of Erdogan v. Basci/Çetinkaya for many years will by now be well-prepared for the coming Trump v. Yellen story. A President determined to boost economic growth at all costs; a central bank head concerned about a over-heated economy based on growth of consumer demand leading to inflation. The confrontation centering on interest rates: President wanting them low; head of CB saying they must rise. Sound familiar? But surely a US President won't be as aggressively headstrong, willful and vindictive as Erdogan? Oh, it's Trump isn't it.


https://www.nytimes.com/2017/03/12/business/trump-fed-interest-rate.html?emc=edit_th_20170313&nl=todaysheadlines&nlid=48388843