Government bonds are in lira only. As far as i know, you don't need to be a resident to take out a bond, but i believe you would need to go in branch to deal with them. There are various time scales, generally the ones that run longer give a greater return. eg Garanti are offering a government bond that matures in april 2010 for a rate of around 19.5%-20%. Once you take out your bond your percentage return is guaranteed. You do have to pay 10% of your gain in tax. You can sell your bond before the maturity date, and you may get less than the expected rate, you may get more depending upon the economy at the time.
The main advantage with bonds is that the percentage is fixed, so if the Turkish central bank interest rates go down, as is predicted at the end of the year, you money will still earn the same rate as when you took the bond out.
At the moment it isn't a good time to change your money into lira. But if you change it when the rate is up and put it into a bond, you should do well.
eg if you invest £100K at 2.25ytl/£, firstly you will be investing 225,000ytl. If your bond gives you 19.5%APR and matures april 2010 (19 months), you will end up with 69,469 ytl interest gross, less 10%, which gives you 62521 ytl interest net, and a total of 287,521 ytl.
converting back to £'s. If the rate is still 2.25ytl/£ you will have £127,787.
If the rate rises to 2.7 ytl/£ you will have £105,278
A big difference if the rate goes up. Most predictions are that the rate will go up again, but it may take some time while the pound sorts itself out.
On the other hand it might go down even further in which case you will make even more when you convert back to pounds.
Always a gamble when you're dealing with exchange rates.
