Author Topic: Presidential decree. ?  (Read 3769 times)

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Offline kevin3

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Presidential decree. ?
« on: March 18, 2016, 11:14:55 AM »


 A Presidential adviser has announced the the Central Bank may cut the lending rate next week.           Independently of course. !!



Offline KKOB

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Re: Presidential decree. ?
« Reply #1 on: March 18, 2016, 13:19:37 PM »
So, in simple terms, if they do, what will that mean for the average Turk and expat ?

Offline Colwyn

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Re: Presidential decree. ?
« Reply #2 on: March 18, 2016, 14:24:45 PM »
For ex-pats who hold, or get paid, in £s they will most likely get more TL in exchange. If money markets share Kevin3's cynicism and start pulling out of TL then ex-pats might get a lot more. Same goes for holidaymakers with £s, €s, $s, etc. But the Lira has been performing well for the last few months so perhaps there is a financial (rather than political/RTE) justification for this and money markets won't panic.

Offline Colwyn

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Re: Presidential decree. ?
« Reply #3 on: March 18, 2016, 14:42:25 PM »
On the other hand, ex-pats who hold TL in Turkish bank accounts are likely to get less interest on their savings.


Wider impacts on the Turkish economy are debatable. RTE says lower interest rates will stimulate business - so more investment, more growth, more wealth. Conversely, others say Turkish companies have a great deal of dollar debt which will more expensive to pay off and so they will suffer economically. Which possibility is the stronger? Toss your coin, KKOB, and make your call.
« Last Edit: March 18, 2016, 14:53:32 PM by Colwyn »

Offline kevin3

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Re: Presidential decree. ?
« Reply #4 on: March 18, 2016, 15:22:16 PM »


   Cynical.??       Me.??        :o :o

Offline KKOB

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Re: Presidential decree. ?
« Reply #5 on: March 18, 2016, 15:31:16 PM »

Toss your coin, KKOB, and make your call.

I'm not tossing or calling anything Boyo.

I've never particularly understood the politics of economics but I'm interested enough if someone explains the basic points that you've just done for us.  :)

Offline Colwyn

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Re: Presidential decree. ?
« Reply #6 on: March 23, 2016, 11:58:39 AM »
Tomorrow's decision will be worth noting. Erdem Basci may ignore the "hint" (order?) that Cemil Ertem has given. He has only three and a bit more weeks in office. He may stick to his principles. The next meeting is scheduled for the day the new Governor takes over. Imagine the pressure on the new man to cut interest rates if Basci hasn't done so. And imagine the message this would send to the money markets.

Offline Colwyn

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Re: Presidential decree. ?
« Reply #7 on: March 24, 2016, 13:32:54 PM »
Turkey's CB has left the main interest rate unchanged on 7.5% but has shaved 0.25% off the overnight lending rate (as "predicted" by Ertem). This makes very little practical difference to the economy/finance but it does signal that the Bank is feeling more relaxed about the Lira. The money markets have accepted this as a reasonable financial decision anf the Lira remains steady. Basci judged it spot-on.

https://next.ft.com/content/29a676e3-9277-3e96-839d-f8abf35b42bb




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