Lira

[Scott and Lisa]

im now starting to get very worried

[nichola]

This is getting ridiculous. The US$ is an incredibly important currency in Turkey most international trading is done in dollars lots of busness rents are in dollars and also many goods and its now 2.26 and also Europe is a big trading partner.

I can't believe interest rates haven't gone up and while its nice to get a good exchange rate for the £ as sure as night follows day prices will inevitably go up. Not great for the normal working Turk and small to medium size business owner either.

I had one of my wholesaler in istanbul on the phone last night almost in tears. Just one cost affected is his business premises rent. Set in dollars at the moment that means a 12 thousand lira increase for him per year. And it's not over yet and it's not the only thing that he pays for that's priced in dollars.

Most of the shop and restaurant rents in Ölüdeniz are also in US$.

Beyond a joke now 

[Scunner]

Exactly, and it's not just the things individuals and small businesses have to buy in dollars that will start to cripple things. Commodities like gas and petrol are imported at dollar prices and that increase (in the amount of lira needed to buy) has to be passed on all the way along the line. You don't need to be an economist to know that when fuel prices increase, the price of everything increases.

Furthermore, the exchange rates of the lira to the pound/dollar/euro has no effect on the "average" Turkish person so they'll be facing these price increases without any benefit of a rising amount of lira per foreign currency unit.

[nichola]

That's exactly right!

It's also ridiculous that so many things in Turkey are priced in foreign currency. Basically this means the lira is not trusted as a currency.

Also the rationale that by not putting up rates because it will lead to inflation is seriously flawed because all the things outlined above by Keith are going to cause inflation anyway. Apparently putting up rates would be like accepting there will be inflation.

So lets all bury our heads in the sand then! Honestly what jokers!

[Kevin Sowten]

Yes Des, 30% more lira for your pounds sterling. Should help a bit when the price of everything goes up 40% over there...

So cynical for one so young Scunner !!!!   

[Scunner]

Realistic I call it  

[Ian]

Can't believe the Central Bank didn't make a small concession and increase interest rates just a single percentage point or one point five as everyone knows its what the markets expected and wanted.

The problem now is that it could be viewed as the Central Bank is too frightened to upset RTE and would prefer to try and swim against the tides of the markets even though it might mean the lira drowning!

Crazy - but it shows how frightened everyone is

President Gul - where are you - time to make a move ........................,

[Colwyn]

Can't believe the Central Bank didn't make a small concession and increase interest rate

Unfortunately it is no longer a small concession. Both RTE and Basci have staked their reputations on seeing off the foreign "interest lobby": RTE by stating it is part of a coup attempt against the AKP government; and Basci by saying he rejects orthodox economic policy being imposed on the CBank and promising to prove his alternative policy will triumph. There is a lot of political testosterone in this.


I wonder how RTE got on in Brussels today. Good news for the markets do you suppose? I don't.

[Ian]

Exactly, and it's not just the things individuals and small businesses have to buy in dollars that will start to cripple things. Commodities like gas and petrol are imported at dollar prices and that increase (in the amount of lira needed to buy) has to be passed on all the way along the line. You don't need to be an economist to know that when fuel prices increase, the price of everything increases.

Just to prove you right I have been monitoring some Turkish Airlines flights from Manchester to Dalaman via Istanbul in March for a few weeks now.

They have been daily at £147 since New Year - now they are £166.

That's about 12% by my reckoning with more to come I suspect !!!

[Rimms]

As an Ex-Pat here, you would think that I'm delighted that my monthly occupational pension which is paid in GBP is a great thing as it will buy lots more lira, the fact is that as someone who still has ambitions to travel, I need to save these pounds rather than change my lira back into GBP, €, $, Thai Bat or HK$.