Calis Beach and Fethiye Turkey Discussion Forum
Information and Services in Turkey Section => Banks, Interest, Money Transfers, Insurance => Topic started by: Colwyn on January 22, 2014, 16:08:47 PM
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This is not something that concerns me directly but I am interested in people's thoughts and perhaps it will an opportunity for ex-pats to exchange notes.
If you have a significant amount of money in a TL account what are you doing about it?
* Have you already converted to Sterling (perhaps having to accept penalty for early withdrawal)? [I mention this because someone on another forum had done this at the start of December and was now very happy he had taken the loss and moved his money).
* Are you going to leave your money in TL accounts come what may?
* Is there some level/date at which you would decide to bail out?
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i wish i had a plan! this is a great topic and i hope to have a clearer idea on what to do after reading the replies
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The other problem is that when buying sterling with your lira you don't pay the day's rate - as in 3.75 today, you pay the selling rate which will be what - 3.85/pound? It's another large consideration when thinking of bailing.
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Good Question. I have a Lira account but I have decided not to bail out just yet as I feel its too soon to panic. Instead I am just going to use whats in it to spend when I am over on holiday and start draining it that way. :-\
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Agreed, an interesting topic but from my point of view, when I lived in the UK, I wasn't considering cashing in any of my GBP savings when the pound crashed against the value of the dollar, so why on earth would I be considering changing my lira back to pounds unless of course I was considering returning permanently to the UK, which I'm not.
I know it's risky playing currency markets and for sure, I got my fingers burned the other day when it cost me 3,800 lira to buy a thousand pounds, but at the end of the day, Turkey might be in a poor political shape but from my limited understanding it's not too bad economically.
For me it's a case of holding my nerve.
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I have a lira account which has a few grand in and iam !
Leaving there.would I be right in thinking that if I bought the equivalent in lira at today's rate in Uk it would help offset any losses ax I will use it on hold etc?
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I'm not planning to bail either. After all I live here and while the central bank isn't putting up rates the banks most certainly are. I'm getting up to 3-4% more than I was a few months ago on most of my accounts.
However I will probably start to save a % of my earnings in £'s just in case I need to make a hasty exit for some reason. I do that anyway when I know I'm planning a trip so I don't have to change lira when I'm going abroad and I suppose I'm lucky that I have a fairly steady income in pounds.
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We have no plans to return to the UK any time soon so we will not be bailing out of our Lira savings account. We are, however, withdrawing Sterling from our UK account whilst the exchange rate is high for our living expenses, and letting our Turkish interest roll over in our savings account. This will use money from UK accounts paying much lower interest than in Turkey, and by keeping the interest in our Turkish savings account it will compensate somewhat for the exchange rate.
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Dave - does it not concern you that you might be changing sterling pounds to 3.75 lira, while there is a possibility of it going to 4, 6 or more to the pound? That would be my worry.
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I have been watching the rates and all the banking updates on a daily basis.. Last year I did put a "significant" amount of sterling into my ING Orange account ready for our retirement due to the higher interest rate in Turkey, at this stage we do not have any plans to turn it back into sterling as we had planned to use it in Turkey over a period of time... I asked someone who is very knowledgeable about what would the implications be if a currency were to collapse I was told if that were to happen then "said" country would not be effected as that particular country would still continue to use their currency and hence had peace of mind for a while with it all going on....I am not at all knowledgeable about this sort of stuff but am now getting a little worried as in should I be thinking along the lines of if the tl was to collapse would we lose all our money, would this be a different case scenario as in that you are guaranteed what ever the amount is think it is 80k or similar that banks have to pay you back if the bank were to go under... I knew Thomas Cook had put on flights in February this year for a reason!! Not being flippant about the situation just trying not to get too panicked at the mo :(
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I asked someone who is very knowledgeable about what would the implications be if a currency were to collapse I was told if that were to happen then "said" country would not be effected as that particular country would still continue to use their currency and hence had peace of mind for a while with it all going on.
Not that knowledgeable I think. Yes, it would continue to use its currency but in somewhat larger amounts for everyday items. As a country's currency decreases in value, imports of essential goods such as oil, manufactured items etc will all increase, sometimes at an alarming rate.
For a country like Turkey who has to import oil and gas, the effects of the weakened lira and and the warring factions within the government/judiciary etc are already being seen due to the weak TL/USD rate.
Most expats though will only start howling when the Efes goes up...
JF
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JF, I normally respect your posts and regard them as well informed, however I thought your last one was less than poor.
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In fairness George, I don't think you are part of the "most expats" John meant ;)
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Fair enough
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As a matter of interest, Finans bank informed us that the max amount in a bank account which the government guaranteed compensation was 30'000tl.
This is in the event of a bank collapse.
It compares to 85k in the UK
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I recall the early days of SGK for expats, and I'm sure others will also remember the amount of panic that finding £80 a month for this compulsory health insurance caused. All over Facebook people were protesting that it was something they simply couldn't find - this would be the straw that broke the camel's back and bring their time in Turkey to an end.
I said then, how precarious an existence it must be, to be living and getting older in a foreign land and be twenty quid a week away from having to leave for good. Well, SGK has changed a lot and often since then, but I assume these people's financial tightrope remains. It may not be compulsory SGK payments, but life costing £20 a week more looks more than likely once everything hits.
I think we'll see quite a reduction in Brits living out in Turkey - which in itself is another loss of revenue/foreign income for the country. Not huge, but significant - especially when everything else is stifled.
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As a matter of interest, Finans bank informed us that the max amount in a bank account which the government guaranteed compensation was 30'000tl.
This is in the event of a bank collapse.
It compares to 85k in the UK
Yes and firstly 30,000 TL is becoming less and less daily, and secondly this is as you say, if the bank goes bust. That must be fairly unlikely for quite a few of them, but if 30,000 (which was £12,000 when it was 2.5/£ but a mere £8,000 today) continues to weaken, you aren't talking about banks going bust, it's about how much your liras are worth when you finally whip them out.
I'm sounding very doom and gloom and don't mean to - it's horrible seeing things sliding while RTE stands letting it happen.
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Gulsah at Finansbank told me it's 100,00 tl.
Can you tell me who said 30,00 as that's a real worry.
Just googled and this article seems to back up what she told me
http://www.fethiyetimes.com/expat-zone/money/7402-turkish-bank-accounts-how-secure-are-your-savings-and-deposits.html
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Oops it was suehugh's fault :)
Under the SDIF protection it is 100k TL per person (per bank) - possibly Finansbank meant £30,000 (which it used to be).
SDIF: http://www.tmsf.org.tr/Resource/documents/guvence_mevduat_en.pdf
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JF, I normally respect your posts and regard them as well informed, however I thought your last one was less than poor.
Why? If you're referring to my final comment I stand by it. I will echo what Keith said, I didn't consider you personally (or many others on here) to fall into that category - but you're a minority, believe me.
Funnily enough, the CBF Minister of Finance just posted this on another thread:
"I toured around a few Turkish forums to see what people were saying about the current crisis. There is an astonishing amount of economic and financial illiteracy out. Many people seem genuinely to believe that the Turkish economy is almost entirely dependant on a tiny strip of land within one mile of the Aegean or Mediterranean coasts. A few of them suffer the delusion that the government relies on the money brought into the country by expats. One character proclaimed the theory that the Turkish government lowers the value of the lira in the Spring in order to attract more tourists into country and raises it again in the Autumn ("stands to reason" he said). And no-one on the forum corrected him on this - mind you he is a moderator."
Many of these "Mugla/Aydin centric" individuals use the price of Efes as their economic barometer and really do believe the "Turks" would miss their money if they left.
JF
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JohnF
From your knowledge of business in Istanbul, are there any rumours about large companies struggling to service their foreign debt, any sign of prospective bankruptcies? But this may a bit early to expect that.
About CBF Minister of Finance, in the context of Turkey I find that a vile insult - but I've been called worse.
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I cant comment on that.
Ok, it was a bit harsh :)
JF
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Nonsense!
Some of them are looking forward to the 14 lira Efes - there's little more impressive about Turkey for them than a beer for a pound.
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Nonsense!
Some of them are looking forward to the 14 lira Efes - there's little more impressive about Turkey for them than a beer for a pound.
Maybe you should have used the quote facility for that reply.
JF
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are there any rumours about large companies struggling to service their foreign debt
Someone just told me that out of overall corporate debt, approx 42% is in foreign currency. They don't know the breakdown of currencies but reckon a high proportion of it is in USD. No reason to doubt his figures.
JF
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Ok, it was a bit harsh :)
JF
Nonsense!
Some of them are looking forward to the 14 lira Efes - there's little more impressive about Turkey for them than a beer for a pound.
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JohnF [insert quote here] Yep last week I read it was about 40%. That's why I was asking. Last Autumn Basci promised the $ dollar rate would be 1.92 at the end of the year. I don't suppose many companies believed him but if some did, and made calculations on that basis, I reckon they'll be struggling at 2.29.
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Someone just told me that out of overall corporate debt, approx 42% is in foreign currency. They don't know the breakdown of currencies but reckon a high proportion of it is in USD. No reason to doubt his figures.
JF
I wonder if the price of all those shiny new planes Turkish Airlines are buying was agreed in dollars. I bet it was. Don't chuck all those dollar reserves into the currency quite yet Reg...
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Gulsah at Finansbank told me it's 100,00 tl.
Can you tell me who said 30,00 as that's a real worry.
Just googled and this article seems to back up what she told me
http://www.fethiyetimes.com/expat-zone/money/7402-turkish-bank-accounts-how-secure-are-your-savings-and-deposits.html
Sorry, it was last September at the end of a very long day.It may have been £30k as Scunner indicated.
I will check my facts before I post in future. ( a daily mail reader-well it's free on the internet.)
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Haha, no worries Sue!
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Haha, no worries Sue!
Sorry, I can't let Sues name be sullied.
I am the daily mail reader.
Sue is more of a House & Garden / knitting pattern browser.
She says they make more sense than the Mail
Hugh not Sue
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Ah, if Sue is heavily into the knitting malarkey maybe she could get the measure of Lance so to speak - he's looking to buy a sweater !
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Nah, it's a willy-warmer he needs. It's just a 5 minute job.
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Someone just told me that out of overall corporate debt, approx 42% is in foreign currency. They don't know the breakdown of currencies but reckon a high proportion of it is in USD. No reason to doubt his figures.
JF
I wonder if the price of all those shiny new planes Turkish Airlines are buying was agreed in dollars. I bet it was. Don't chuck all those dollar reserves into the currency quite yet Reg...
I suspect the Boeing order is, and its likely the Airbus order is in EUR. Still a big chunk of THY state owned, 49.12% - so unlikely to see any downscaling of orders. Not sure if their claim to have $1.2bn of banking reserves is true now...
JF
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Dave - does it not concern you that you might be changing sterling pounds to 3.75 lira, while there is a possibility of it going to 4, 6 or more to the pound? That would be my worry.
I only change the minimum we need to live on, on a week to week basis. Mostly the money is from our Company Pensions but if I have to, then we will dig into short term savings. We have to get through to November when I get the State Pension which will then probably open up the SGK can of worms. I just think that if this is a short term blip, 3-6 months, then make as much as you can. There are opinions that when the elections are over the Central Bank will raise interest rates to stabilise and then to increase the value of the Lira. Some think the damage is irreversible and the Lira may never recover. Whatever we do it is a gamble.