Author Topic: Inflation up again last month  (Read 3799 times)

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Offline JohnF

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Inflation up again last month
« on: February 05, 2016, 11:01:44 AM »
Its so long since I looked the Central Banks inflation policy I couldn't remember what the targets were for the end of 2015, but I suspect they wont be happy campers.  Last month saw it rise to 9.58% (up from 8.81%), mainly due to the increases in food prices and tax hikes on alcohol and tobacco - electricity going up by 6.8% didn't help either.

I noticed in a thread below this one Nichola was asking for best interest rates - 10 and 11 percent seemed to be about as good as folks were getting and today Finans are offering 10.2% as their best deal (TD a/c's).  I reckon this is the narrowest gap I've seen for a while between highest interest available on deposit accounts and the current rate of inflation.

Unfortunately, it looks like the TCB expect it to continue to rise over the next wee while:

In sum, annual inflation increased in the fourth quarter due to an ongoing rise in food prices as well as the lagged effects of the Turkish lira depreciation throughout 2015. The upcoming inflation outlook is expected to depend on both the volatility in energy and unprocessed food prices and the effects of the global market uncertainty on inflation expectations. In addition, the large adjustment made to net minimum wages for 2016 will have an impact on inflation. Therefore, inflation is expected to remain elevated for some time. At this juncture, in addition to maintaining a tight monetary policy stance, fighting against the structural elements of inflation also remains important.

On the basis that there is a higher likelihood of the lira losing more ground against the dollar, maybe the best strategy is to lump your TL into dollars and take the 1.85% (or there abouts) available on TD accounts in the knowledge that your are actually making a little bit extra, as opposed to simply keeping pace with inflation...

JF

 



Offline Colwyn

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Re: Inflation up again last month
« Reply #1 on: February 05, 2016, 14:19:28 PM »
But 10.2% is better than 1.85%. Surely that's obvious. And banging your head against a brick wall is a really good idea.

Offline usedbustickets

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Re: Inflation up again last month
« Reply #2 on: February 05, 2016, 17:06:40 PM »
So despite this and other bad economic news in recent weeks, the TL holds steady and in some cases improved against other currencies.  Now I know that the pound and dollar have not done great in recent weeks, but I rather suspect a big fiddle going on in background to bolster the .  Is it Reg's friends from the small and large Gulf states bailing out Turkey, and indeed themselves given their investment in Turkey, directly or indirectly or indeed as hot money in and out?

Turkey cannot keep defying economic gravity as it is ..... yes it does.  So is there a fiddle or what?

Offline Colwyn

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Re: Inflation up again last month
« Reply #3 on: February 05, 2016, 17:46:01 PM »
Despite setbacks in the tourism sector I believe the Turkish economy is basically sound. It has a strong manufacturing base (unlike the UK) and could rise again as a solid emerging economy. It's weakest economic issue is probably its reliance on foreign energy supplies but the drastically low price of oil & gas should be suiting it well. But we all know that the real problem is not the economy; it is the political mayhem caused by one person. He has zipped up his mouth over the last few months and the Lira is prospering accordingly.

OK, a very simplistic analysis but there might be something in there.

Offline Scunner

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Re: Inflation up again last month
« Reply #4 on: February 05, 2016, 20:01:40 PM »
Its so long since I looked the Central Banks inflation policy I couldn't remember what the targets were for the end of 2015, but I suspect they wont be happy campers.  Last month saw it rise to 9.58% (up from 8.81%), mainly due to the increases in food prices and tax hikes on alcohol and tobacco - electricity going up by 6.8% didn't help either.

I noticed in a thread below this one Nichola was asking for best interest rates - 10 and 11 percent seemed to be about as good as folks were getting and today Finans are offering 10.2% as their best deal (TD a/c's).  I reckon this is the narrowest gap I've seen for a while between highest interest available on deposit accounts and the current rate of inflation.

Would that make the overall situation

10.2% - 15% (tax) over 9.58%

= 8.67% interest - 9.58% inflation

= -0.91% nett/year

(Although I have no idea of tax is 15% these days)

Offline davybill

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Re: Inflation up again last month
« Reply #5 on: February 06, 2016, 08:44:19 AM »
11.75% interest at Seker bank this month.

Offline yabanci

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Re: Inflation up again last month
« Reply #6 on: February 06, 2016, 09:47:44 AM »
Is that just for new account holders for 1 month, as a special introductory rate?

Offline davybill

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Re: Inflation up again last month
« Reply #7 on: February 06, 2016, 12:40:26 PM »
I have had my account a few months now?

Offline JohnF

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Re: Inflation up again last month
« Reply #8 on: February 06, 2016, 15:08:22 PM »
Its so long since I looked the Central Banks inflation policy I couldn't remember what the targets were for the end of 2015, but I suspect they wont be happy campers.  Last month saw it rise to 9.58% (up from 8.81%), mainly due to the increases in food prices and tax hikes on alcohol and tobacco - electricity going up by 6.8% didn't help either.

I noticed in a thread below this one Nichola was asking for best interest rates - 10 and 11 percent seemed to be about as good as folks were getting and today Finans are offering 10.2% as their best deal (TD a/c's).  I reckon this is the narrowest gap I've seen for a while between highest interest available on deposit accounts and the current rate of inflation.

Would that make the overall situation

10.2% - 15% (tax) over 9.58%

= 8.67% interest - 9.58% inflation

= -0.91% nett/year

(Although I have no idea of tax is 15% these days)


Got to be honest, I'd forgotten about tax liabilities.  Makes the 1.85 on a dollar or euro account look even more attractive in real terms.

Although, as someone mentioned to me recently, if you're not a drinker, smoker or driver then the effects of inflation are reduced slightly.  The one area no-one can escape from though are electricity and gas prices - I suspect we'll further increases in those in the not too distant future.

JF




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