Lira

[Colwyn]

I toured around a few Turkish forums to see what people were saying about the current crisis. There is an astonishing amount of economic and financial illiteracy out. Many people seem genuinely to believe that the Turkish economy is almost entirely dependant on a tiny strip of land within one mile of the Aegean or Mediterranean coasts. A few of them suffer the delusion that the government relies on the money brought into the country by expats. One character proclaimed the theory that the Turkish government lowers the value of the lira in the Spring in order to attract more tourists into country and raises it again in the Autumn ("stands to reason" he said). And no-one on the forum corrected him on this - mind you he is a moderator.


Of course there are a few who have some sort of idea as to what is happening and some very well informed but they are pretty scarce. I am beginning to agree with Martin Lewis that basic understanding of personal finance should be taught in UK schools, except that things-teachers-should-do is already a very long list and getting longer.

[kenkay]

Best thing we did was buying with money we could afford to lose ten years ago. Sounds smug I know but it was a conscious decision back then.

Yeah, it does sound smug Stuart but it was exactly how we felt when we bought at Violet.

[Karennina]

I agree with you Colwyn both things re personal finance and also that to teach it would be on teacher's ever growing lists...
I admit I am relying heavily on people on here that seem to know what they are talking about re the lira to make my decisions and judgements whilst watching the rate in Turkey and also in uk...
I too am not at all meaning to sound smug and I genuinely feel for the people who are finding themselves in situations that they would rather not be in as in if they want to sell up and return to the UK they can not, but we never bought our property to make money on either in renting or hoping for it to increase in value and then sell at a gain...It is what it is a holiday home...
I am so glad of a lot of things at the mo and one of those things is that is we never sold up in the uk and moved to Turkey completely which six years ago I wanted to do sooo badly, once the novelty or adventure or whatever along with the rose coloured glasses wore off I simply could not bear to find myself in that predicament...
Again thanks for this great forum who does seem to have members that are in the know of what is occurring re these very unstable times...

[Diverbaz 1]

Are we on this slippery slope again............................

FIRST TURKISH LIRA
After periods pegged to the British pound and the French franc, a peg of 2.8 Turkish lira = 1 U.S. dollar was adopted in 1946 and maintained until 1960, when the currency was devalued to 9 Turkish lira = 1 dollar. From 1970, a series of hard, then soft pegs to the dollar operated as the value of the Turkish lira began to fall.
1966 – 1 U.S. dollar = 9 Turkish lira
1980 – 1 U.S. dollar = 90 Turkish lira
1988 – 1 U.S. dollar = 1,300 Turkish lira
1995 – 1 U.S. dollar = 45,000 Turkish lira
2001 – 1 U.S. dollar = 1,650,000 Turkish lira
2005 – 1 U.S. dollar = 1.29 new Turkish lira (The use of New Turkish lira, which drops 6 zeros from the currency Turkish lira, was implemented in 2005)
2010 – 1 U.S. dollar = 1.55 Turkish lira
19 October 2012 – 1 U.S. dollar = 1.79 Turkish lira

[Scott and Lisa]

ive decided mines coming out, id rather lose a few thousands now than run the risk of losing it all

[Colwyn]

S&L, it seems you will joining large numbers of Turks in bailing out of TL in savings accounts: "So far, the currency’s weakness has been driven by Turkish companies and banks and by households switching savings into dollars"
http://www.ft.com/cms/s/0/32e28ff2-81f2-11e3-87d5-00144feab7de.html

[desmartinson]

Showing 3.80 to the pound now.

[Scott and Lisa]

im just going to right it off as a bad decision or bad luck, and move on

[Scunner]

Scott don't feel like that - any investment has made interest and while few of us are lucky enough to enter and exit at the optimum times (if any of us) you have the option to choose at least. I know of quite a few people who lost everything in Turkey. And that is literally everything.

If you see something rolling towards a cliff your human instinct is to grab it, not to get the deck chair out and hope it stops before the edge. 

[Colwyn]

CBank changed its currency tactics today. Instead of "managed foreign-exchanged auctions" (I'm not sure what these are but I guess they are selling dollars in exchange for lira off-market) it is now intervening directly (to $100m) in foreign exchange sales. I don't know quite what the difference is but the Wall Street Journal article (below) says it is a more powerful measure and hasn't been tried for 2 years. Unfortunately it also says this won't work: one cynical financial expert said it just gave Turkish people the chance to buy more dollars with their lira - I guess that will please many. How well did this new tactic work? Well the TL is back over 3.80 to the £. CBank has another new scheme to introduce on Monday so, according to the article, it is hoping to dampen things down tomorrow to get through to its new idea. I don't know what this is yet so I'll have to do some research. I suspect it is imposing behind-the-scenes, under-the-counter interest rate increases for businesses and banks whilst keeping the headline Base Rate the same - thus saving RTE's and Basci's political face.

http://online.wsj.com/news/articles/SB10001424052702304632204579338160540599296?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304632204579338160540599296.html