Author Topic: So... how safe is your money in Turkey?  (Read 17419 times)

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Offline JohnF

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Re: So... how safe is your money in Turkey?
« Reply #10 on: January 25, 2017, 12:04:16 PM »
Do you have any inside info as to how much weaker the lira would go before collapse, or what else could cause collapse? 

No.  As Colwyn said, the lira has lost 24% against the USD since last summer and shows no sign, as yet, of recovering - and as Stoop mentioned, this is not a recent situation, the lira has been losing ground against USD for years.  Way back in 2008/9 it kinda strengthened against the quid for a while, but its all been downhill since then.

Who knows where the tipping point will be, if it ever comes to that. 

Can you see a time John F, when if properties are sold in lire, that the proceeds of sale could be at risk?

It depends what you mean by "at risk".  I think your sale proceeds could be at risk of devaluation if kept in lira due to increased inflation and a poor performing lira, but the simple way to avoid that is to change it straight into a hard currency. 

We're fortunate as the price for our place in Karagozler was agreed in sterling - if you sold an apartment in lira, lets say for 200,000tl last week, you'd have got £43,103 in your back pocket - if you did the same transaction today you'd only get £41,666.  For someone selling a large villa that'd be a fair chunk of change to lose. 

Some economic forecasters are suggesting that inflation will continue to rise, it was 8.53% in December and unemployment is now at a six year high.  The central bank appear to be confident that this crisis is temporary, I hope they're correct. 

If anyone wants to read a bit more about the TMFS, and how they operate, here is their web site: http://www.tmsf.org.tr/2016.tr?bid=235

JF



Offline kayakebab

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Re: So... how safe is your money in Turkey?
« Reply #11 on: January 25, 2017, 12:07:25 PM »
My problem is I changed my money at 2.6...
Eeeeeek

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Offline faymoore

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Re: So... how safe is your money in Turkey?
« Reply #12 on: January 25, 2017, 12:09:44 PM »
Phil has always worried about putting any larger amounts in our Turkey Bank Account. We keep it topped up to pay standing orders but would not commit a lot of money to it.  The interest is very good and we are always surprised at what we get for a relatively small amount. 

I agree with you Jacqui...
Sue and I are actually in the process of selling up due to personal circumstances however, over the last 7 or 8 years have been tempted by the high interest rates available in Turkey.

The issues for us as documented by many others is the volatility of the currency and the uncertanties of guarantees etc..
I guess you pay your money and take your chances, but not for us.

Dave.

Offline sadler

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Re: So... how safe is your money in Turkey?
« Reply #13 on: January 25, 2017, 12:20:26 PM »
JohnF, sorry to have been vague.  When  I say "at risk" I am thinking that if the sale was in lire, would the transfer of proceeds go into the seller's lire account in Turkey? Whilst being held there, could there be a risk that if the bank collapses, the proceeds go with it? Or is there a way that the lire could be transferred directly into an account in U.K.

Like you, I sold a couple of years ago and although to a Turkish couple, insisted on payment in sterling and was successful. I understood at the time that this was unusual and would be even more so now that the lire is so weak. I am asking out of curiosity really, and in the hope that it may help others who are possibly considering moving their assets out of Turkey.

I would like to add that I find your posts very informative and useful.  :)

Offline JohnF

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Re: So... how safe is your money in Turkey?
« Reply #14 on: January 25, 2017, 13:12:13 PM »
I'll try and qualify my original post - if a bank was in bother, and called in the TMFS before it collapsed, then in theory all your accounts, lira, sterling etc are covered by the guarantee up to the prevailing limit.  The problems start to arise if there are multiple failures, think back to the banking crisis in the UK a few years ago - Lloyds TSB, RBS and Bradford & Bingley all basically going tits up and having to be bailed out by the government. 

The TMFS fund is finite - it can only pay so much then unless the government bailed it out, you'd get a proportion of your money back.  If there was a banking crisis to the extent that multiple banks were failing like the UK in 2008, then the question is could the government afford to bail them out?

This is why I made the comparison with the D.A.S.K. scheme - its funds too are finite.

I don't think we're anywhere near that point just now, the retail banking sector in Turkey is an attractive investment for foreign companies.  Finans is now owned by the National Bank of Qatar and Garanti is 40% owned by BBVA, one of the largest financial institutions in Spain.  Akbank is owned by the Sabancı family who probably have enough dosh to buy Turkey if they wanted.

So, I suppose the answer to your question is no, its not at risk currently.  But that could change.  Who knows.

JF






Offline philrose

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Re: So... how safe is your money in Turkey?
« Reply #15 on: January 26, 2017, 06:44:48 AM »
Bailed out of the lira a couple of years ago. We took a hit but it would be far worse if we were doing it now...

Offline mercury

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Re: So... how safe is your money in Turkey?
« Reply #16 on: January 27, 2017, 14:10:31 PM »
We waited as did a lot of others for the lira to drop until about 4 years ago when we decided to get out...We too took a big hit but I shudder to think how much we would have lost now..

Offline JohnF

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Re: So... how safe is your money in Turkey?
« Reply #17 on: February 03, 2017, 18:59:00 PM »
I don't think we're anywhere near that point just now, the retail banking sector in Turkey is an attractive investment for foreign companies.  Finans is now owned by the National Bank of Qatar and Garanti is 40% owned by BBVA, one of the largest financial institutions in Spain.  Akbank is owned by the Sabancı family who probably have enough dosh to buy Turkey if they wanted.

So, I suppose the answer to your question is no, its not at risk currently.  But that could change.  Who knows.

And change it has...

Several Turkish banks have had their ratings downgraded by S&P, Moodies and Fitch, three of the major credit agencies.

Fitch banks: http://www.reuters.com/article/idUSFit988563

S&P banks: http://bianet.org/english/world/183206-s-p-downgrades-credit-rating-of-4-banks-in-turkey-after-revising-turkey-s-rating-to-negative

Moodies: https://www.moodys.com/research/Moodys-Reviews-for-Downgrade-the-Ratings-of-17-Turkish-Banks--PR_352342

Pretty much every high street bank has taken a wallop on their standings.  But before anyone rushes out to fill their mattress with lira, these downgrades appear to have come on the back of Turkey as a country being downgraded to junk status as far as the agencies are concerned.  The apparent inability to control rising inflation and the poor performance of the lira I suspect also played a factor here.

JF

Offline sadler

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Re: So... how safe is your money in Turkey?
« Reply #18 on: February 03, 2017, 19:58:12 PM »
Thanks for keeping us updated.   :)

Offline davybill

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Re: So... how safe is your money in Turkey?
« Reply #19 on: February 04, 2017, 07:46:55 AM »
As for myself lived in Turkey 9 years now, bank interest has paid for my
Lovely life here and wouldnt change to go back to the uk.
The interest rate still  11% in the bank so quite happy.it pays my rent
And bills and the lovely sunny days and many friends here make it
Worth staying. ...enjoying retirement




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