Now What ?

[cranfield]

I see that Turkey has cut it's base rate again to 12% .

The guy i share the rented house with, went to his bank yesterday and was told they are no longer doing any "long term" savings deals and their monthly rate is now 9% . And likely to drop again over the next few months.

In bits, he reccons that he cannot afford to live in the TRNC any more as his income is going down and the prices are going up.

But if he moves back to Blighty and converts his TL to Sterling, he'll have the square root of feck all.

Any financial wizz kids out there that could offer any advice ?

ps: He's thought about hanging himself - but wary about the dubious quality of the locally made rope ..

[waddo]

He could nip over the border - while he still can - wait till the end of January when he becomes a Third Country National, declare himself as an illegal alien and get deported? The RoC is like the TRNC and has no money left to afford flights back to the country he came from - as the RoC don't recognise the TRNC as a legal country they can't deport him back to here because we don't exist! So effectively he becomes a refugee. The TRNC won't let him back in again if he moans and groans enough at the crossing points and in any case because the EU won't take any action on the new law the RoC have told the EU about till it's too late for them to do anything (It's Christmas and holidays are on the move in the EU) then by their own law the RoC won't be able to allow him to cross back into the TRNC.

He should base himself near Larnaca so he can get into the airport and live there in the warm as a stateless person - that seems to be coming popular these days since the film was made - lol.

In truth I think he will not be alone in his predicament and feel sorry for him but financially I can't see a way out for him at all!

[EnjoyingTheSun]

Well the TL has dropped 3% in a month so I wonder what his ceiling is, $6 to the lire?

[Keithcaley]

Well the TL has dropped 3% in a month so I wonder what his ceiling is, $6 to the lire?

Eh?

[Brazen]

Well the TL has dropped 3% in a month so I wonder what his ceiling is, $6 to the lire?

If they carry on dropping interest rates the lira will also drop.

[cranfield]

Well the TL has dropped 3% in a month so I wonder what his ceiling is, $6 to the lire?

If they carry on dropping interest rates the lira will also drop.

What's the opposite to " win win" .... ?

[EnjoyingTheSun]

Well the TL has dropped 3% in a month so I wonder what his ceiling is, $6 to the lire?

Eh?

Well he needs high interest rates to keep the currency stable. Its not a popular currency but the traders will put money in for a high interest rate. Lower the interest rates and the currency will weaken.
He must have a cut off point against the dollar at which he will have to raise interest rates.
If not he should

[EnjoyingTheSun]

Well the TL has dropped 3% in a month so I wonder what his ceiling is, $6 to the lire?

If they carry on dropping interest rates the lira will also drop.

That's my reading of it

[EnjoyingTheSun]

Well the TL has dropped 3% in a month so I wonder what his ceiling is, $6 to the lire?

If they carry on dropping interest rates the lira will also drop.

What's the opposite to " win win" .... ?

For those who have loans in TL it's a win, those who have loans in Euros or dollars will be lucky to be SP. Those who pay rent in euros or dollars it's a lose. Those who rely on the interest off their bank deposits, it's a lose.
Economics is very much getting the balance right

[Keithcaley]

Well the TL has dropped 3% in a month so I wonder what his ceiling is, $6 to the lire?

Eh?

Well he needs high interest rates to keep the currency stable. Its not a popular currency but the traders will put money in for a high interest rate. Lower the interest rates and the currency will weaken.
He must have a cut off point against the dollar at which he will have to raise interest rates.
If not he should

Did you mean 6 Lira to $1?

[Hammerhead]

The pound is strong with interest rates at 0.5

[EnjoyingTheSun]

Did you mean 6 Lira to $1?

Yes that way round! doh

[EnjoyingTheSun]

The pound is strong with interest rates at 0.5

The pound is a currency with a lot of confidence in, the TL isn't and is very volatile.
Hence anyone over here who puts all their money in TL because the interest rate is 3 times higher needs their heads testing but some will put in some because the interest rate makes it an attractive gamble for smaller amounts.
If you remember our ERM crisis in 1992, Britain put up interest rates from 10% to 15% in a day?

[cranfield]

The pound is strong with interest rates at 0.5

The pound is a currency with a lot of confidence in, the TL isn't and is very volatile.
Hence anyone over here who puts all their money in TL because the interest rate is 3 times higher needs their heads testing but some will put in some because the interest rate makes it an attractive gamble for smaller amounts.
If you remember our ERM crisis in 1992, Britain put up interest rates from 10% to 15% in a day?

Verry true, but Derek is in it up to his neck.

Any ideas how we can help him ?

I know its very easy to post about plastic tin lids, give away oranges and uncle tom comly and all - but he's in genuine need of help.

any financial gurus care to offer some advice ( he's 68 btw ) .
.
.

[EnjoyingTheSun]

Verry true, but Derek is in it up to his neck.

Any ideas how we can help him ?

I know its very easy to post about plastic tin lids, give away oranges and uncle tom comly and all - but he's in genuine need of help.

any financial gurus care to offer some advice ( he's 68 btw ) .
.
.

He has a state pension?
A private pension? Was he ever in any pension schemes even for a few years that he might have forgotten about?
He has savings?
Does he have any property, here or in UK?

[Mowgli597]

The pound is strong with interest rates at 0.5

The pound is a currency with a lot of confidence in, the TL isn't and is very volatile.
Hence anyone over here who puts all their money in TL because the interest rate is 3 times higher needs their heads testing but some will put in some because the interest rate makes it an attractive gamble for smaller amounts.
If you remember our ERM crisis in 1992, Britain put up interest rates from 10% to 15% in a day?

Verry true, but Derek is in it up to his neck.

Any ideas how we can help him ?

I know its very easy to post about plastic tin lids, give away oranges and uncle tom comly and all - but he's in genuine need of help.

any financial gurus care to offer some advice ( he's 68 btw ) .
.
.

How dare you be so supercilious about other postings on this forum, mine included.

I’m sorry for your friend’s situation but there’s nothing I can do to help, not being a financial genius. And, with respect, there are people far worse off than he is - local people struggling to make ends meet come to mind as well as the homeless.

Are we, therefore, to sit her saying wailey wailey because we can’t help?

[buddy]

My advice would be to buy an airplane ticket back to UK with whatever he has left. If he can't afford rent and health care he has no choice!

[sophie]

Like others I don't mean to seem unsympathetic however there have been literally scores and scores of advice on this forum about coming over to live here in the first place and from what you have told us about your friend, he doesn't appear, to me at any rate, tick any of the boxes at all. You have been given what advice people have at the moment and your remarks do not endear you to receiving any further. If your friend cannot raise the funds for a cheap single fare from down south then perhaps you could give/loan him the money to do so? Many of the people on this forum are not rolling in cash (myself included) but we manage and if your friend cannot, then he really needs to leave here and go back to UK. At least he will be able to throw himself on the mercy of the Social Services, which I might add most of us contribute to and will be baling him out in any case.

[EnjoyingTheSun]

Unless your friend can raise any more money by getting fresh income from a private pension, rent out a property in the UK or get a work permit and a job then assuming he has cut his expenses to the bone then a ticket home is the best advice.

If he doesn't have enough money to survive at the moment or is getting near that point then he won't make it even in the shortish to medium term.

If you are relying solely on a state pension then you have to figure out, at best you will get inflation figure based rise in your pension based on the UK inflation rate. Unfortunately the likelihood is the TRNC inflation rate is going to far outstrip the UK inflation rate.

So if the UK inflation rate is 2.5% a year for the next 4 years and the TRNC inflation rate is 10% and there is no FX movement then your, say, £165 weekly pension will rise to just over £182. But if all goods rise at 10% yearly then that £165 of goods/services will cost over £241. Even at 5% the goods/services will cost over £200.

Obviously the savings rate could go up significantly but even if you just use the interest then the value of those savings will depreciate. If you dig into the capital sum then the interest will go down and you will go through the capital in quite a short time.

[sophie]

Enjoyingthesun, I tried to understand your reasoning and got lost! However I think what you are saying in a very roundabout way, this "friend" can't afford to live here? That being the case, the soon he applies for the single ticket, the better.

[EnjoyingTheSun]

Enjoyingthesun, I tried to understand your reasoning and got lost! However I think what you are saying in a very roundabout way, this "friend" can't afford to live here? That being the case, the soon he applies for the single ticket, the better.

Yep that’s the answer. Point is with inflation high but income fairly fixed you need a fair amount of fat in your budget medium to long term.

[RAZR63]

In the 5 years I have been here the TL has increased every year against the £ It it a an emerging market currency and very volatile,
Despite all the good economic news coming out of Turkey at the moment it can change at a flick of a switch?. It only takes a minor conflict or a minor disagreement with the USA to upturn the apple cart and the Lira starts rising again. Turkey is up to its neck in dollar debt. For perspective – Turkey has nearly $180 billion in short-term external debt. With almost all maturing over the next 12 months. . .
This is substantially more than what the Turkey has to give. (And still much more than the $77 billion in gross foreign reserves they have)
I do hope that their economy does continue to improve for the sake of the locals here. but I personally cannot see that happening. I am not an Economist, my views are only from what I have read. https://www.al-monitor.com/pulse/origin ... dogan.html

[cranfield]

In the 5 years I have been here the TL has increased every year against the £ It it a an emerging market currency and very volatile,
Despite all the good economic news coming out of Turkey at the moment it can change at a flick of a switch?. It only takes a minor conflict or a minor disagreement with the USA to upturn the apple cart and the Lira starts rising again. Turkey is up to its neck in dollar debt. For perspective – Turkey has nearly $180 billion in short-term external debt. With almost all maturing over the next 12 months. . .
This is substantially more than what the Turkey has to give. (And still much more than the $77 billion in gross foreign reserves they have)
I do hope that their economy does continue to improve for the sake of the locals here. but I personally cannot see that happening. I am not an Economist, my views are only from what I have read. https://www.al-monitor.com/pulse/origin ... dogan.html

I think tough times ahead for us expats.

[Laura B]

I think tough times ahead for us expats.[/quote]


Tougher times for locals. Expats (normally) should have a fallback position. Locals cannot.

[EnjoyingTheSun]

In the 5 years I have been here the TL has increased every year against the £.

Ish.
We are still down on the high of 8.8 in August 2018 and 6.7 in August 2019 so it is still all over the shop but the trend is certainly the pound improving against the TL.
I think anyone who has the bulk of their savings tied up in a TL deposit account because the interest rate is three times what it is in a sterling account and is relying on that interest to live might need a plan B. That's a hell of a gamble

[tomsteel]

I think tough times ahead for us expats.

Tougher times for locals. Expats (normally) should have a fallback position. Locals cannot.[/quote]

A number of 'locals' are far more wealthy than most expats living here and have their monetary assets spread over a number of currencies in many other countries or offshore accounts.

[sophie]

Absolutely tomsteel, in the nearly 16 years that we have been here the whole demographics has become virtually unrecognizable. When I see the expensive womens clothes shops, jewellers, shoe shops, furniture shops etc, etc, I realise that I am the one that now look for cheaper places to shop, not the reverse as it used to be. Also the number of really poor have not changed in 16years, but the rich percentage is huge from what it used to be. What has changed with the really poor is foreign nationals, as opposed to TRNC personel as it was in the past.