Author Topic: Lira getting Stronger - Why?  (Read 291461 times)

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Offline Ian

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Lira getting Stronger - Why?
« on: October 28, 2014, 22:42:29 PM »


Not sure why but in spite of all his critics (RTE) he seems to be either lucky or slowly gaining strength?

Offline usedbustickets

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Re: Lira getting Stronger - Why?
« Reply #1 on: October 28, 2014, 23:05:10 PM »
I wondered ;D the same myself, especially as the pound was appreciating against the dollar and euro. So rather than it being something good with the TL,  I suspect that the current depreciation of the euro and particularly the dollar, may have a disproportionate benefit to economies like Turkey and so the TL appreciates against most currencies, not just the dollar and euro.

Mind you I could be wrong in this suggestion, and Reg has been right all along...... Nah only kidding ;D

Offline thebillet

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Re: Lira getting Stronger - Why?
« Reply #2 on: October 29, 2014, 06:19:05 AM »
As I understand it the significant decrees in the price of oil has eased the pressure on TRY, it has a greater significance for Turkey than other economies and  a higher price was factored in previously. It is now unwinding the pressure on TRY. Commentators say as the price of oil is expected to go down even further then it will strengthen again. It is perhaps one small break for the ordinary Turk coming just as the season ends. I fear that although this is some respite for the TRY having a war literally on your border will have a number of tourists think twice about coming next year: we have had one visitor pull out this year because of the perception of Turkey based on news reports in UK. If a trend starts this would IMHO have a negative impact on TRY.

Offline tinkerman

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Re: Lira getting Stronger - Why?
« Reply #3 on: October 29, 2014, 07:45:20 AM »
Or it could be Europe is in a steady decline, the Russians are taking over the oil markets and Turkey has leapt into bed with Russia.

Offline Ian

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Re: Lira getting Stronger - Why?
« Reply #4 on: October 29, 2014, 08:21:14 AM »
3.5477 this morning - strange - as all the commentators who dislike / disapprove of RTE say the lira is in a bubble and should be / will be 4+ in the not too distant future but it is going the other way ???

Offline Colwyn

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Re: Lira getting Stronger - Why?
« Reply #5 on: October 29, 2014, 09:41:42 AM »
Since the presidential election the TL/£ has varied in a band between 3.7 and 3.5 with regular peaks and troughs. Over the last few weeks it has strengthened from its 7 month record 3.7 to the present 3.55 but this would have to be maintained for a longer period or go under 3.5 before I think we can make any confident statements about a trend in the currency.



Offline usedbustickets

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Re: Lira getting Stronger - Why?
« Reply #6 on: October 29, 2014, 10:22:33 AM »
Perhaps the reason for the steady lira over the last couple of months has been the Central Bank's (surprising) holding of Turkish interest rates, against the political pressure from Reg and Prime Minister Mini Me to slash interest rates in advance of next year's election.  If the central bank had collapsed against the political pressure it would have lead, said many commentators and ratings companies, to a minimum 4TL to the £.  Mind you there is still time for Reg and co. to step up the pressure still... :-\

Offline Colwyn

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Re: Lira getting Stronger - Why?
« Reply #7 on: October 29, 2014, 14:31:56 PM »
Not only has the Turkish Central Bank kept interest rates high (8.25% on one week repo) it has also been supporting the Lira through daily currency auctions. In October it quadrupled its spending to $40million per day buying back TL. So, it turns out we don't need grand global politico-socio-economic theories to explain the strengthening pound - collapse of EU economies, Russian counter sanctions, bailing out Ukraine, Cameron not wanting to pay his bills - the Lira has been getting stronger because CB has been throwing mountains of money behind it. No wonder Pres and PM are worried about what this is doing to the economy and, hence, AKP chances in next year's elections - economic growth slowed from 4.7% in first quarter to 2.1% in second quarter following the interest rate hike in March.

Announcement of new policy to be found here:
http://online.wsj.com/articles/turkey-to-defend-lira-with-increased-foreign-exchange-auctions-1411741258
Impact on economy to be found here:
http://www.ft.com/cms/s/0/c05636f0-38cb-11e4-a53b-00144feabdc0.html

Offline Ian

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Re: Lira getting Stronger - Why?
« Reply #8 on: October 29, 2014, 17:39:10 PM »
In the words of that great economist Mama Cass

And it's getting better
Growing stronger
Warm and wilder
Getting better everyday, better everyday

3.5398 now - good news for some

Offline Colwyn

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Re: Lira getting Stronger - Why?
« Reply #9 on: October 29, 2014, 17:55:58 PM »




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