Kibkom North Cyprus Forum

Lira @ 3.38 Is this a record low,no good if you need to convert Lira back to Sterling.

It was 3.398 at one stage which is the lowest against sterling I have known in the 14yrs I have lived here. As you say there is no way you can change it back to sterling without a massive loss.
Its a worrying time and I can't see it improving for a long time for people that have invested in the banks.

Yes - but it sure makes the pension go further.

JBA, Its so goodI feel like offering Mr Cameron my £10 Christmas bonus back - but maybe I will just squander it like normal - lol.

Well said.
Who would want to change their money back to Stirling??
Only the people that need to leave as the interest rates have dropped.
It just can't get any better.

I only withdraw stirling from my uk account then change it to tl as my uk bank charge a minimum of £5.50 every withdrawal if I get lira.Daylight robbery.

The attitude of some posters on this thread wrote: It's so good

Please spare a thought guys for those not benefitting from the lira's predicament - I know of at least one Turkish-Cypriot importer/distributor that is struggling ... and may have to make reduncancies

Just got 3.400

My tame T C taxi driver has to pay £250 a month to sit on the taxi rank. He is not too pleased with the lira rate!

Has prices risen to compensate local shops etc ?

I know when I was over last. I had a good rate at 325 ,so changed money to sit with me for when I am in turkey next year

Kav

Yesterday the rate on the television was 3.48 at 8pm.
The doller was 2.8
Euro (I missed)

Feel sorry for people moving back to England and needing to change back to sterling - big losses

How much weaker can the lira get against the pound. I thought Turkey had a good strong economy. So why the weak currency?

Reached 3.50 tl to Pound now!

I just hope and pray they don't end up devaluing the tl then we will be down the river without a paddle.
Everyone was shouting about losing money with FMA but it seems rather quiet with the tl situation, which could effect millions of people not thousands be it with investment or just the cost of living for local people.
A few months ago my bank manager said they were not to concerned about the lira unless it reached 3.5 well it's arrived.
Let's hope 2014 is a good year for all.

Looks like going to be 3.60 any moment soon!

My bank said today they expect it to be 4 next month.

Lets hope they are wrong Deniz1.

Deniz 1 who are your bank?

http://www.nationalturk.com/en/turkey-c ... news-45661



http://digitaljournal.com/news/world/tu ... cle/364369

Universal bank. Its now 3.55

This is scary unless you are living on UK income, I know most of my cash is Lira, and that is because I live here, no pension yet, so am paying the price by rising prices, lets hope it starts to go backwards soon, because, it does not matter how you are receiving your money, with rising cost of living we all suffer!

How safe are lire savings accounts ?? It is understood that money would be lost if withdrawals took place, but could history repeat it self when depositors lost money way back ?

The problems in Turkey are an internal issue that has caused those clowns in the international money markets to try to make some money. As always it is the "man in the street" that suffers with worry about bank accounts and the cost of living etc. I would take the whole lot and shoot them into space as they serve no useful purpose to any but them selves.

kiplet I do not understand what you mean about loosing money on withdrawals? If there was a sudden rush on the banks they would put a cap on withdrawals, maybe. What would you do if you took money out of accounts? If you try to exchange you would potentially loose around 50% of value based on a year ago.

On one hand I am hoping the Turkish Central Bank ups the interest rates to control the F/X rates. As a counter, that would cause serious problems to those with loans as the cost of every day living is rising quickly. He, ho!!

Would be interested in what Father Ted has to say as a former professional in the finance sector.

IMO The Turkish government has been manipulating the foreign currency markets for a very long time.

They have set interest rates at very high levels to attract "hot money" and then the hard currencies used to purchase lira have been recycled as cheap money to businesses, home buyers and consumers that has funded the Turkish economic boom. This seems like a no-loose situation to all concerned - unfortunately is masks the underlying real economics of the country.

Now there is political turmoil in Turkey, the hot money will depart to safer places, and economic realities will kick back in.

I have thought for many years that the real exchange rate should be somewhere around 5TL = £1. I hope I'm not right as this would devastate the economies and banks in Turkey & the TRNC.

Lira has hit 3.6 today there were some worried looking faces in the bank today I must say.
One cyp chap was changing his money to sterling even though he was standing to lose £15k but he said that if he then uses sterling he will get 3600tl to every £1000 he changes and probably more if it rises, as he couldn't see a recovery for a long long time and would make up some of the capital he has lost, but quite a gamble I think.

The guy at the exchange seems to think it will peak toward the end of the month and start to settle back. It has crept up to 3.59/3.60 and immediately it starts to drop again to 3.55 ish so I think the Turkish Govt is supporting it.

Got 3.55 at Speed Cash a couple of hours ago so it has altered a tad.

Back to 3.6 this morning,wonder what the end of the day will bring.

3.63 now ..some are predicting 4.00.

At 09-15 this morning it was 3.60,30 mins later was 3.57 in exchange in Girne.

Its like watching the time passi its gone from 3.60 to 3.6449 in a couple of hrs, its crazy.
God only knows where it will end up soon.

Just worked out that my gardener who gets paid in sterling earns more now per hr than a bank manager how mad is that. Will be having words in the morning I think.

Solic200 by the end of the day your gardener could be on better wages than President Eroglu !

Why? you are still paying him the same in sterling as you were before I assume so its not costing you money. Its not his fault if he gets more lira per pound.

Deniz1
Being a clever gardener when the tl was at 2.35 he asked for more money as the sterling was weak which I happily obliged him with, so I think this is a case of swings and roundabouts actually.
The tl ended on 3.666 Friday so my grass may get longer if it keeps rising.

Well it gone over 3.70 perhaps those pundits who said it would make 4.00 could be right!

The Turkish Central Bank and most analysts know that Interest rates should be increased to support the Lira and stabilise the Economy and Inflow/Outflow of Foreign Investment as well as supporting Government Bonds/Yields, even though this would cause many borrowers, businesses and workers increased hardship.

The TCBank are now appearing to be bowing to pressure from Erdogan not to raise rates while the Country is heading to Elections. it would be a vote loser for Erdogan.

The political protests in Turkey will have to subside, maybe after Elections, before any direction can be found.

This means the Lira/£ could easily rise to 4, or even 5 short term. Especially if the US start serious 'Tapering'.

In NC the problem is going to continue to be Inflation, especially for anything Imported in $ or £.

What to do individually is governed by personal circumstances.

As quoted in an artical in the cyprus free press about whether to sit tight or take a loss now and change back to sterling, a well known song "Should I stay or should I go now"
If only I could find that crystal ball.

solic200 wrote: If only I could find that crystal ball.

Contract for Difference to negate any lira loss.

Just a quick overview of this..
GBPYTL Size 0.5 contract equal to £128 for every one Lira movement.
I'm guessing that £128 would cover about 60K sterling equivalent deposit you might hold in a time deposit YTL account, "for every one Lira it drops".

If you are shorting the Lira the roll over night rate is £9.50, you have to pay the interest difference.
If you close the contract every Friday late afternoon and reopen Monday morning your rollover fees are £38 a week.

On another note.
What would help if people combined their resources and listed down events that might influence these sudden currency movements, i.e. Turkish Local elections / UK unemployment rate announcements / scheduled dates of Bank of Turkey interest rate decisions, anyway you get the point. It just saves you getting spooked and closing your position unexpectedly. Perhaps someone could start a thread listing dates as they become knowledge, it would certainly help the ones who have YTL tied up in time deposit accounts.
As always DYOH.

I'm sure you mean well but frankly I don't understand the contents of your post..

It's a great pity because you obviously must be qualified but words in simple English to a thick Brummie like me would be beneficial .

Art wrote:I'm sure you mean well but frankly I don't understand the contents of your post..

It's a great pity because you obviously must be qualified but words in simple English to a thick Brummie like me would be beneficial .

Sorry for not explaining clearly,

Contract for Difference, is an agreement between two parties to exchange the difference between the opening price and closing price of a contract. CFDs allow you to trade on live market price movements without actually owning the underlying instrument on which your contract is based. You can use CFDs to speculate on the future movement of market prices like currencies regardless of whether the underlying markets are rising or falling. You can go short (sell), allowing you to profit from falling prices, or hedge your portfolio to offset any potential loss in value of your physical investments.

So lets say:
My agreement/contract could be that for every one lira fall against sterling I receive £128. This is based on a margin of 0.5 leverage. If you increase the leverage to 1.0 it means you receive £256. I can quit this any time by selling the currency back, just takes one click of the keyboard.
However it can go against you if the Lira starts to gain against Sterling by the same amounts (minus of course).

Just for this example you have 50,000 sterling in a YTL time deposit account and the Lira falls by one point against sterling so you then would loose roughly £128. Now by use of this contract you have gained £128, thus negating your losses.

If the Lira goes the other way and that's up it will cost you £128, but as your time deposit YTL account you already hold has increased against Sterling it's as though the Lira never moved.

The payment for the contract is in the spread, It's usually one third of a Lira when purchased and on third of a Lira when you sell (close out your position) if you do not close out your position by the end of the day it cost £9.50, if you keep the contract going through the week it totals £9.50 x 4. I do not count Friday because you can close out Friday 5.00pm.
On the Monday you restart the contract based on the forex exchange rate price so it can be a little twitchy as it mostly depends on what RTE and co have been up to over the weekend.
You can if you are prepared to pay the £66 per week (for all 7 days) keep this contract going for months without ever closing out.

And lastly this has nothing to do with the Turkish banks or your YTL time deposit account, It's a separate entity altogether.

Thank you.

It's much clearer now.

CFD's are one of a number of 'leveraged' investments.

The upside is you can easily double/treble+ your stake.
The downside is you can easily not only lose your original stake but leave yourself with a far greater loss which is your liability to pay.

e.g. It goes well, your £10k becomes £20/30k very quickly.
It goes badly, you have not only lost your £10k, you now owe a further £10/20k or more.

It's a bit like playing poker with chips you haven't got. If you increase your bet and lose, you have to pay the loss or gamble with another hand to try to win back your losses.
if you lose again, you also risk losing your shirt/home/wife/husband/Ferrari etc.

CFD's are for experienced investors who can afford to lose not only their original stake but accept any further losses their 'bet' has left them with.

Recent data shows about 90% of private/small investors lose more than their original stake on such investments.
The other 10% now own your Ferarri!

No disrespect to raffs intended.

owl wrote:CFD's are one of a number of 'leveraged' investments.

The upside is you can easily double/treble+ your stake.
The downside is you can easily not only lose your original stake but leave yourself with a far greater loss which is your liability to pay.

Thats true Owl,

But I wouldn't normally suggest this unless you had a YTL account that was hemorrhaging money, if you place a stop limit on your deal and as the example I gave above match the one lira advantage gain to a one lira loss, your position regarding your YTL time deposit account would be static.
Just adding to this if you start out at 3.8 YTL to the pound and the Lira hits 4 Ytl to the pound you would be effectively still be at 3.8 (your CFD account would be up by the difference and your existing time deposit account would no doubt be down by the same amount( so effectively cancelling each other out.

Got 3.92 but recovered a little now !

Still got a pound in my pocket - not liable to get anymore, don't understand half of what is above but for me that is probably a very good thing indeed.

I get my pension in sterling into UK accounts, draw sterling from the ATM here, change it at best rate I can - when its up I smile, when its down, I still smile because its better here than there. I think I will continue to smile till the Turkish elections are over then who knows?