Lira getting Stronger - Why?

[JohnF]

Better shut up now, said enough to get five years in Silivri prison     

What's Spain's recent record like on extraditing people to Turkey on terrorism charges?

Very good actually.  They've refused the majority of requests from Ankara, usually for writers and journalists - who are all in fact members of several terrorists organisation, all at the same time.  Or they've simply been nasty to that lovely man in charge.

 

JF

[Colwyn]

S&P, in an unscheduled meeting, took the emergency step of pushing Turkey's sovereign debt (the sum of government borrowing) further into "junk" status. S&P said it was concerned with Turkey's overheating economy riding on a credit-fueled wave and lack of control by the Central Bank. The AKP has stirred this pot by promising a $6billion handout bonanza ahead of June's election. I suspect the lira will be tumbling back down to record low levels in the next few weeks.

[Colwyn]

Lira didn't take long: passed 4.2 to $ this morning. € steadily over 5 again and £ catching up.

[stoop]

£5.70 on XE at 12:30pm

[Scunner]

£5.70 for what

[stoop]

£5.70 for what

Oops - 5.70 TL for £1 ?

[Colwyn]

Yesterday the Central Bank got nervous about the weakness of the lira against the dollar which had got to 4.2901. So it cut back on the amount of foreign currency each bank can hold as part of its reserves. The lira recovered to 4.25 in reaction. Unfortunately, today the lira sank even lower and hit 4.3:$ another ¾% down. Is anybody going to suggest an interest rate increase before the election? ........ Thought not.

http://www.hurriyetdailynews.com/turkish-central-bank-takes-reserve-requirements-step-to-shore-up-lira-131429

[JohnF]

I think what happened with the lira (after election announcement) a couple of weeks ago was not dissimilar to the "new manager bounce" often referred to in football when a poorly performing manager is sacked and a fresh face brought in.

It's still well over five to the euro, and you are correct about the dollar - record low this morning.  It is slowly but surely losing strength against sterling and currently sitting at 5.80, down from 5.54 in the days immediately subsequent to the election announcement.  It wouldn't surprise me to see 5.90+ against sterling be the end of the week and 4.40+ against the dollar.  On the other hand the TCB might pull a rabbit out of a hat...   

One of the main issues appears to be the central banks inability to curb inflation, currently sitting just under 11%.  Standard and Poors also downgraded Turkey's rating again, and amongst the areas of concern they cited the consistently missed inflation targets.

JF

[JohnF]

Not a good day for the lira yesterday. It didn't take till the end of the week for 5.90, in fact depending on todays trading there could be record lows against all three major currencies.

Sitting at 5.91 earlier this morning before recovering to 5.88 against the squid and 4.37 against the dollar.

JF

[Colwyn]

Central Bank is buying up huge amounts of lira to boost the currency. It is working  so far (about half an hour) with $ and £ down about 1%. And going lower. Will it last? I doubt it.