Calis Beach and Fethiye Turkey Discussion Forum
Information and Services in Turkey Section => Banks, Interest, Money Transfers, Insurance => Topic started by: tribalelder on April 30, 2011, 05:59:17 AM
-
PM Recep Tayyip Erdogan spoke on April 29, 2011, at the general congress of the All Industrialists and Businessmen's Association, held in Istanbul.
The Turkish government aims to "decrease both inflation and interest rates," said Prime Minister Recep Tayyip Erdogan on Friday, adding that his primary aim is to cut the real interest rate down to zero in the long run.
Are you relying on interest payments to support your lifestyle...This will bu**er it up!:(
-
if he go's through with this it will be a blow for the banks in fethiye,and the people relying on the lnterest,
last brit out,turn the lights out,lol
-
Imo Brian this is all about getting into the EU, good or bad thing? I am just not sure!
-
An interesting article here about the appetite for borrowing even with relatively high interest rates. Personally I think the unavailability of mortgages until recently has probably saved a lot of heartache as experienced by other economies.
http://www.nytimes.com/2011/04/26/business/global/26turkey.html?pagewanted=1&_r=2&ref=business
-
I think it was a golden egg Brian, the goose itself was 'normal' :D
-
I think that Erdogan is more interested in the welfare of Turkey than a few Brits living in Fethiye.
I really do not know how industry can survive in Turkey and compete in the world market. Turkey is in the Top 20 economies in the world and has the highest interest rates by a mile. On top of this Turkey has near double digit inflation.High interest rates prevent borrowing and this in turn prevents growth. With the age of the population the government must encourage economic growth to create jobs.
A drop in interest rates could easily cause the value of the TL to fall and make Turkish exports cheaper.
I am probably going to get a kicking for this but here goes anyway. I think it is very naive and poor planning to base your retirement solely on the basis of what income you may receive from interest rates. Once the interest stops covering your living costs you are in trouble because you then have to dip into your capital and this in turn results in less interest earned. It just becomes a roundabout that is difficult to get off.
Apologies for being so blunt.
-
quote:
Originally posted by Ovacikpeedoff
I think that Erdogan is more interested in the welfare of Turkey than a few Brits living in Fethiye.
I really do not know how industry can survive in Turkey and compete in the world market. Turkey is in the Top 20 economies in the world and has the highest interest rates by a mile. On top of this Turkey has near double digit inflation.High interest rates prevent borrowing and this in turn prevents growth. With the age of the population the government must encourage economic growth to create jobs.
A drop in interest rates could easily cause the value of the TL to fall and make Turkish exports cheaper.
I am probably going to get a kicking for this but here goes anyway. I think it is very naive and poor planning to base your retirement solely on the basis of what income you may receive from interest rates. Once the interest stops covering your living costs you are in trouble because you then have to dip into your capital and this in turn results in less interest earned. It just becomes a roundabout that is difficult to get off.
Apologies for being so blunt.
your not really gordon brown come out of hiding are you Gerry ;)
-
"I am probably going to get a kicking for this but here goes anyway. I think it is very naive and poor planning to base your retirement solely on the basis of what income you may receive from interest rates. Once the interest stops covering your living costs you are in trouble because you then have to dip into your capital and this in turn results in less interest earned. It just becomes a roundabout that is difficult to get off."
Totally agree with you there Gerry.
-
No Des, it is the boring accountant in me. If it was a 2 horse race I probably would back both horses each way.You know what accountants are like. Accountants never make good Chief Executives as they spend too much time worrying about risks. Do not get us mixed up with bankers.
-
"With the age of the population the government must encourage economic growth to create jobs."
What age is the population then?
-
Turkey has one of the youngest working population in the developed world. Over a quarter of the population is under the AGE OF 14. The average age of a Turk is 28.2 where in the UK the average age is 39.6 and rising.
The source of the above is the OECD.
-
quote:
Originally posted by Ovacikpeedoff
in the UK the average age is 39.6 and rising.
The source of the above is the OECD.
At last ...................... something that I am not just average at :o ;)
-
I don't think this necessarily means that expats' hopes of making money from their savings is over - even in the very unlikely event of the AKP actually managing to achieve zero interest. Although I am not an expert in these matters, I understand that the abolition of interest does not mean that you get no return on your capital. What is excluded is that form of return that consists of a fixed return to the depositor over a specified period of time. See NOTE at end). There are many other ways of profiting from financial and other business transactions. For example, here is how Wikipedia describes Wadiah (safekeeping).
In Wadiah, a bank is deemed as a keeper and trustee of funds. A person deposits funds in the bank and the bank guarantees refund of the entire amount of the deposit, or any part of the outstanding amount, when the depositor demands it. The depositor, at the bank's discretion, may be rewarded with Hibah (see above) as a form of appreciation for the use of funds by the bank.
It is not difficult to envisage, for example, Garantibank and Finansbank in rivalry for capital each publishing figures on how generous they have been in appeciating their depositors. From the point of view of the depositor there may be little practical effect. I guess maybe you find out out what return you are getting at the end of a specified period rather than at the start. You might think of it as not being a "customer" of the bank but as a "partner" in their business investment and entitled to get a share of the profits. Islamic banking can be very effective in promoting business. Indeed many people ascribe the success of the "Anatolian Tigers" of Central Anatolia - partially - to this form of banking.
As I say, I am no expert, but it is just as well to remember that the "Western" way of doing things is not the only possibly successful way.
What muddies the water on this is that Erdogan says he is not doing it for Islamic reasons but because people should work for living not live off unearned income. I take this as no more than propaganda appealing to poor people and workers who the AKP presents itself as representing against "the idle rich". An election is coming up.
NOTE: In terms of economic theory, Islamic finance does not accept the doctrine of "the time value of money". Put crudely this is the notion that £1 today is worth more than £1 in the future (this has nothing to do with inflation which is a quite separate matter). This means if you deposit money over time you must be compensated for this. Islamic banking soes not accept this but if yoour bank invests your money and makes a profit then you can share in this. Indeed, why the hell else would you use a bank (other than for safe storage and paying bills). So, you don't get "interest" just for leaving your money in the bank for a month; you do get some form of return if the bank makes a profit in its activities during that month.
-
P.S. Ovacikpeedoff can have great fun figuring out how the hell Islamic banks can possibly calculate the profits they make on a 31 day basis.
-
Hi Colwyn, how are you getting on. Are you still in Hospital. I hope all is good with you.
Regards
Tony
p.s. Although I have never met you, I feel I know you from reading your interesting stories.
-
Thanks for your concern. Just a quick note not to hijack this thread. Have been informed today that I am fit to leave and am to be repatriated direct from hospital to UK as soon as it can be arranged.
-
"I heard that bloke Colwyn's being deported..."
-
:)
-
Islamic banking works on the basis of profit and loss. If a profit is made the depositor is entitled to a share and if a loss is made then the depositor takes a share of the loss. Islamic law prevents usary interest but does allow profit. In most cases it is difficult to really distinguish between profit and interest. For example if I wanted a loan for a car an islamic bank would refuse to give me a loan. What they would do is buy the car and sell it on to me at a higher price. This being the profit. I would pay back the money over an agreed term. The transaction is done under buying and selling rather than lending with interest.
The whole profit would not be given to the depositors as some would have to be kept for future development of the business. There is something else that needs to be done as some of the profit needs to be given to the less off in Society.
With regards 30 day, 60 day or 90 day accounts I have not got a clue how they work. The bank would haveto prepare accounts to calculate the profit that is available for distribution. I would assume that profit would have to be calculated on a 6 monthly basis and then distributed.
In todays markets some Islamic banks have had some difficulties so I presume no profits would be distributed.
Although you can make money your income is not guaranteed.
As I said earlier I am no expert on Islamic banking or Islamic law.