Lira getting Stronger - Why?

[madmart]

6.95 just now

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[JohnF]

I wouldn't be surprised if it breaks seven today, another milestone and against a weak pound which has lost ground this week due to the Brexit bollox.

The important one for Turkey is the dollar.  The wee fella hates the dollar and it really riles him that so much of Turkeys debt is in dollars.  There's a good article in Al-Monitor about this, and one significant paragraph is this:

"According to figures compiled by the financial daily Dunya, 54% of Turkey’s exports and 36% of its imports last year were paid in euros, while the dollar was used in 39% of exports and 58% of imports. Only 3% of exports and 2% of imports were paid in Turkish liras."

His solution to reducing reliance on the dollar is to try and use national currencies when dealing with trading partners, such as the rouble with Russia, the Yuan with China etc.  How successful that'll be remains to be seen.

Its well worth a read.  Al-Monitor

JF

[KKOB]

6.98672 on xe.com at 09.15 !

[blueclad]

 ASDA in Southampton today when we went to buy £ 50 worth to tide us over when we arrive late in Calis  very soon  had SOLD OUT no more due to next Tuesday... Todays rate was   6.5460   at 10 am showing on the screen

[KKOB]

Funny that, 'cos the money exchange in ASDa Wrexham were only offering 5.9 on Tuesday and had plenty in stock. I can't think why.  

[yabanci]

Showing  7.00 on XE at the moment.

[JohnF]

Not just 7.00 now, but 7.03.  Dollar at 5.45.

Wait, wait, all is not bad - the world renowned economist and financial guru Berat Albayrak has a plan, and its not just any old plan    this one's a wee fella's son in laws plan.  In fact, it's so special he's not going to tell us about it until tomorrow.  Oh the excitement.

It really had better be a good'un, went to 7.045 while I was typing this post...

JF

[yabanci]

Yes,  he will be revealing his New Economic Model.

http://www.hurriyetdailynews.com/turkey-to-reveal-new-economic-model-on-aug-10-135633

[MrT]

Its quite shocking

Lira has lost 3.07% against the £ just today, and 7.3% against the pound in 1 week. And the £ isn't in great shape. I'm sure there will be some winners and losers who gamble on Forex this week.

Someone was telling me at Christmas in the Nil bar me how much he gets in interest keeping his money in a Turkish bank account and how little he earns when he had his cash in a UK bank account. He didn't seem to grasp that it loses more than that in value with depreciation against the £.

[JohnF]

Someone was telling me at Christmas in the Nil bar me how much he gets in interest keeping his money in a Turkish bank account and how little he earns when he had his cash in a UK bank account. He didn't seem to grasp that it loses more than that in value with depreciation against the £.

To be fair, if someone is resident in Turkey and doesn't have the need to change lira into sterling or euros, then the depreciation against other currencies isn't so much of a problem.  It only becomes a problem if they decide to leave Turkey and cash in their lira, that's when their losses will become apparent.

What is an issue is that interest rates are high for a reason - and the main one is that inflation is high in Turkey.  So once you take the tax off the interest received and gauge that net figure against the current inflation rate, then they're not making as much as they think.  There are investment products available in the UK that give far higher returns than the high street banks, with much less risk than lumping it into a Turkish bank.

JF