Author Topic: Lira getting Stronger - Why?  (Read 291375 times)

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Offline Colwyn

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Re: Lira getting Stronger - Why?
« Reply #990 on: April 05, 2018, 10:30:02 AM »
It looks as though the Central Bank is unwilling or unable to protect the lira from further falls. The dollar has settled over 4.00, the euro is at 4.95 and the pound on 5.67. The usual CB mechanism for strengthening the currency is by raising interest rates but Erdogan ended March by insisting: "Interest rates are the main reason behind all evils in the economy,” and is now demanding a "competitive lira" by which he means an attractively weak lira to make Turkish goods more competitive internationally. I think those taking £s to Turkey can expect to be getting far more ₺ in return - even if they have to spend far more of them than they did last year.

http://www.hurriyetdailynews.com/turkish-govt-working-on-plan-to-lower-interest-rates-sources-129789


https://en.trend.az/world/turkey/2882401.html

https://www.reuters.com/article/turkey-currency/turkish-lira-weakens-to-near-record-low-on-interest-rate-worries-idUSL5N1RI15O



Offline JohnF

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Re: Lira getting Stronger - Why?
« Reply #991 on: April 05, 2018, 11:30:13 AM »
He's always been against high interest rates but his perspective is more personal than him having a great grasp of international or domestic finance issues, at least thats my opinion.

The problem with a weak lira is that while it does make Turkish exports more attractive, it hits the man in the street far more than it does those in their gilded palaces.  Higher rents, increased prices for imported goods, reduced ability to travel outside Turkey etc.  A lot of business in Turkey is done with hard currencies such as the dollar and the euro, no-one wants to use the lira due to its volatility.  Yes, Turkey does need to reduce its trade deficit but there are many other ways to do it - allowing the lira to tank is a poor choice, if indeed it is a "choice".

JF

Offline Colwyn

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Re: Lira getting Stronger - Why?
« Reply #992 on: April 05, 2018, 14:06:16 PM »
He's always been against high interest rates but his perspective is more personal than him having a great grasp of international or domestic finance issues, at least thats my opinion.
I suspect his perspective is also influenced by the Islamic injunction against usury, around which he attempts to wrap a, not very plausible, economic cloak.

Offline JohnF

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Re: Lira getting Stronger - Why?
« Reply #993 on: April 05, 2018, 14:19:26 PM »
That's what I meant  :) maybe I should have said "personal and religious".

JF

Offline JohnF

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Re: Lira getting Stronger - Why?
« Reply #994 on: April 06, 2018, 15:53:44 PM »
Broke 5.70 to the quid now.

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Offline JohnF

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Re: Lira getting Stronger - Why?
« Reply #995 on: April 06, 2018, 18:44:18 PM »
All is revealed...  there are rumours flying about that the Deputy Prime Minister Mehmet Şimşek is considering resigning.  He's the chap who is responsible for the economy   :)

Al Monitor made a very telling comment, "An ethnic Kurd who had enthusiastically embraced Erdogan’s now shelved overtures to the Kurds, he is known to oppose the president’s unorthodox views on the economy".  They also said that he has been "persuaded" to stay on, for the "good of the country and the good of the cause".  In this context, "cause" is seen as Turkeys Islamist movement.

Full articles here: Al Monitor    HDN


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Offline Colwyn

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Re: Lira getting Stronger - Why?
« Reply #996 on: April 09, 2018, 15:22:57 PM »
The lira continues to notch up milestones on its downward journey. The £ passed 5 back in November, the dollar hit 4 last week and now the euro scores 5. Next up: the pound hits 6?

Offline yabanci

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Re: Lira getting Stronger - Why?
« Reply #997 on: April 09, 2018, 15:27:06 PM »
Next up: the pound hits 6?

Well the £ just hit 5.75

Offline JohnF

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Re: Lira getting Stronger - Why?
« Reply #998 on: April 09, 2018, 15:29:02 PM »
Next up: the pound hits 6?

Unless the TCB do something drastic then yes, 6.00 it'll be and not that far away.  The lira has gone from 5.27 to 5.75 in the space of four weeks, terrible state of affairs for many businesses in Turkey.

JF

Offline Stuart T

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Re: Lira getting Stronger - Why?
« Reply #999 on: April 09, 2018, 21:07:45 PM »
TUI Tiverton (Devon) today gave me 5.35 Lira to the pound. I went there 'cos I needed some "arrival" money.

I have US dollars and Euros to exchange when I get there. I will use a Fethiye bank.

TUI initially offfered 5.05 but when I told them that the Post Office rates were better they went from 5.05 to 5.35 Lira to the pound.





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