Author Topic: Lira getting Stronger - Why?  (Read 294199 times)

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Offline Laura B

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Offline Colwyn

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Re: Lira getting Stronger - Why?
« Reply #891 on: November 28, 2017, 15:03:52 PM »
And, obediently, the lira has lost 1.25% against the dollar.

Offline kevin3

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Re: Lira getting Stronger - Why?
« Reply #892 on: November 28, 2017, 22:03:20 PM »




              5. 29  this evening

Offline Scunner

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Re: Lira getting Stronger - Why?
« Reply #893 on: November 28, 2017, 22:06:07 PM »
4 to the $ looming close :O

Offline yabanci

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Re: Lira getting Stronger - Why?
« Reply #894 on: November 29, 2017, 05:28:22 AM »
Above 5.30 this morning.

Offline Colwyn

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Re: Lira getting Stronger - Why?
« Reply #895 on: November 29, 2017, 11:11:20 AM »
4 to the $ looming close :O
This is the third time in two weeks that the dollar has shot to 3.95 and then stuck. Is TCB doing everything it can behind the scenes to support the lira to delay the psychological barrier of 4 being broken (we know it has plenty of foreign currency and gold to do this)? Will TCB break this time?
« Last Edit: November 29, 2017, 11:25:22 AM by Colwyn »

Offline Stuart T

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Re: Lira getting Stronger - Why?
« Reply #896 on: November 29, 2017, 16:41:34 PM »
4 to the $ looming close :O
This is the third time in two weeks that the dollar has shot to 3.95 and then stuck. Is TCB doing everything it can behind the scenes to support the lira to delay the psychological barrier of 4 being broken (we know it has plenty of foreign currency and gold to do this)? Will TCB break this time?

Help please! Brain trying to work this out.

Does this mean that Turkey is buying foreign held lira with its stocks of dollars /gold to falsely over value the lira?

I'm not an economist - by any stretch - but this seems like a very short term fix.

(Is this what happened when Gordon Brown sold our gold or was that a different thing altogether?)


Offline Colwyn

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Re: Lira getting Stronger - Why?
« Reply #897 on: November 29, 2017, 17:06:11 PM »
Your first and second suppositions are correct. The Turkish Central Bank can help to ensure that there is a demand for lira - keeping prices up - by buying them itself. It got much of the cash and gold for doing this by the government persuading Turkish citizens that the patriotic thing to do was to give up their own dollars and gold in exchange for lira - thus supporting the lira and providing the Central Bank with more reserves without them having to go onto the international markets. [I don't know how many Turks actually followed this advice, rather than hiding their wealth in the Isle of Man]. Your second point about it being short term is also probably right since, sooner or later, the Bank must run out of dollars and/or gold. The hope is that by "weathering the storm" the lira comes out on the other side of the storm and then will not need support. Perhaps there will be good economic news for Turkey and perhaps inflation will come down. The problem for the Central Bank is that its most powerful weapon to support the lira, to increase interest rates, drives Erdogan into a spitting frenzy and you might get called traitor, Gulenist, terrorist and be chucked in prison.

On the other point about Brown's gold sell-off this was different. Brown thought that the UK would get a better return on its assets by investing them instead of leaving them sitting idly in gold bullion. Later gold went up in price and, with the benefit of hindsight, some people said be had been wrong to sell. He was almost certainly wrong to let people know he was selling off big piles of gold as this drove down the price. Here's a reflection on those old events that is written without too many of those long economicky words with which, allegedly, Gormless Gove has fallen in love:
https://www.ft.com/content/5788dbac-7680-11e0-b05b-00144feabdc0

Offline Stuart T

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Re: Lira getting Stronger - Why?
« Reply #898 on: November 29, 2017, 17:09:06 PM »
Thanks Colwyn.

Much clearer now.

Offline Colwyn

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Re: Lira getting Stronger - Why?
« Reply #899 on: November 29, 2017, 17:35:46 PM »
It seems to have to sign in to read the article. i don't think you have to pay; I certainly haven't.




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