Is it time to cut your losses!!

[solic200]

With the lira dropping everyday and threatening to hit 4tl to the pound and the bank interest rates also dropping, and will continue to drop according to my bank today, is it time to cut your losses and withdraw your money or does anyone think the lira will ever recover?
I know this doesn't effect some people with sterling pensions etc but unfortunately we are not all in that position.
I am asking this question on here as there doesn't seem to be much discussion in the local press or on the forums concerning the future of the lira.
Thanks

[Owl Lady]

I am probably one of the lucky ones who has a pension in Sterling. I honestly could not afford to" cut my losses and run" I certainly could not afford to live in the UK with the same life style as here! or
NORMALLY the weather!!

[davidthomas]

Interesting newspaper article here:

http://www.hurriyetdailynews.com/intere ... sCatID=344

It doesn't look good for the Lira, certainly in the short term.

Ratesfx predict it could possibly go up to 5 TL to the GBP. http://www.ratesfx.com/predictions/pred-try.html

But who knows. If we could predict exchange rates with any certainty we'd all be millionaires.

[sophie]

Like Owl Lady we couldn't afford to cut and run and pensions paid in sterling. Nor could we afford to live in UK with the same lifestyle as we do here. We don't live like Kings here, but we certainly couldn't afford to have the same lifestyle in the UK. We moan about cost of electricity here, but seeing the gas prices in the UK, yee Gods they are horrendous. Prices in Supermarkets here are going up in leaps and bounds, especially on imported items. The weekly food bill is noticeable much higher than it was a few months back but that's to be expected.

[stellasstar1]

Yes it's very worrying, as we see our savings getting smaller and smaller, especially if you're thinking of moving back to England,who wants to change their lira back to sterling now. What if anything could make the lira stronger?

[Rosehillgirl]

Getting rid of Erdogan and the AKP would help the Lira-but he's going nowhere anytime soon.

His meddling in Turkey's Central Bank policy-demanding that interest rates be brought down to 0% has left the Lira in free fall.

He views 'interest' as un-Islamic and is determined to achieve 0% even if his citizens starve in the streets-after all he is the new Sultan!!

Rosie

[Hedge-fund]

Perversely, Erdogan's interference will be a positive for the Turkish economy.

All central banks are in a race to the bottom in trying to devalue their currencies to make their economies more competitive (people will buy their goods because they are relatively cheap). The only central bank not actively looking to devalue is the FOMC but even they are stalling on a rate rise.

Having slashed interest rates to zero and beyond (in some countries the banks "pay" negative interest on deposits - which in reality means you put in £100 and get back £98) these central banks have one weapon left - QE - which is basically printing money to buy stuff in the hope of creating stimulus in their economies.

Turkey will be ok in the long run because it has a young demographic and a potentially massive home market as it modernises. The unknown aspect is what Erdogan will do to get in the way of real market forces. That's why people are shunning TLR at the moment.

But as I say - a weak Lira will boost the economy in the short run.

[Barney]

Perversely, Erdogan's interference will be a positive for the Turkish economy.

All central banks are in a race to the bottom in trying to devalue their currencies to make their economies more competitive (people will buy their goods because they are relatively cheap). The only central bank not actively looking to devalue is the FOMC but even they are stalling on a rate rise.

Having slashed interest rates to zero and beyond (in some countries the banks "pay" negative interest on deposits - which in reality means you put in £100 and get back £98) these central banks have one weapon left - QE - which is basically printing money to buy stuff in the hope of creating stimulus in their economies.

Turkey will be ok in the long run because it has a young demographic and a potentially massive home market as it modernises. The unknown aspect is what Erdogan will do to get in the way of real market forces. That's why people are shunning TLR at the moment.

But as I say - a weak Lira will boost the economy in the short run.

It really depends on the elasticity of demand. You sell more goods if your prices are low but you need to sell more of them to achieve the same income. As for the massive young home market, they tend to suck in more imports like computers and iPhones.

[RAZR63]

Example:
This is a matter of supply and demand in the currency
market. When the value of the yuan is down, it takes less of their own currency to get the same amount of value in yuan, making Chinese products more attractive. Conversely it costs more yuan to buy the same amount of the foreign currency, making products from the home country less attractive.

Where this comes into play with the yuan, is that currency markets are normally free markets—meaning that they are controlled by supply and demand. However China keeps the value of their currency down to maintain a competitive advantage that their lower valued currency provides for them. Sadly for China, this type of close minded activity actually hurts their long term potential for growth, since they pretty much suppress inflation artificially and don’t maximize the potential value of their goods and services.

[RAZR63]

Currency Wars: Is a Weaker Currency Good or Bad?
Good article here:
http://www.schwab.com/public/schwab/nn/ ... ood-or-Bad

[Hedge-fund]

Perversely, Erdogan's interference will be a positive for the Turkish economy.

All central banks are in a race to the bottom in trying to devalue their currencies to make their economies more competitive (people will buy their goods because they are relatively cheap). The only central bank not actively looking to devalue is the FOMC but even they are stalling on a rate rise.

Having slashed interest rates to zero and beyond (in some countries the banks "pay" negative interest on deposits - which in reality means you put in £100 and get back £98) these central banks have one weapon left - QE - which is basically printing money to buy stuff in the hope of creating stimulus in their economies.

Turkey will be ok in the long run because it has a young demographic and a potentially massive home market as it modernises. The unknown aspect is what Erdogan will do to get in the way of real market forces. That's why people are shunning TLR at the moment.

But as I say - a weak Lira will boost the economy in the short run.

It really depends on the elasticity of demand. You sell more goods if your prices are low but you need to sell more of them to achieve the same income. As for the massive young home market, they tend to suck in more imports like computers and iPhones.

A weak currency helps exports. So the money coming in from abroad is worth more not less. You therefore need to sell fewer to achieve the same income. In reality you will sell a lot more because foreign markets find the goods cheap.

A weak currency harms imports so people will buy fewer foreign computers.

An entrepreneur will therefore open a computer making warehouse putting the young to work who will use the money to buy more things. This younger demographic is not hampered by an ageing population to look after (pay for)

This is how a weak currency helps the country's economy.

IF the politicians don't get involved!!!

[Groucho]

A weak currency helps exports. So the money coming in from abroad is worth more not less. You therefore need to sell fewer to achieve the same income. In reality you will sell a lot more because foreign markets find the goods cheap.

A weak currency harms imports so people will buy fewer foreign computers.

An entrepreneur will therefore open a computer making warehouse putting the young to work who will use the money to buy more things. This younger demographic is not hampered by an ageing population to look after (pay for)

This is how a weak currency helps the country's economy.

IF the politicians don't get involved!!!

I've been trying to explain this for a while now.... some people just don't get it... Having a strong currency during a global economic downturn is not the most helpful thing. Turkey will look cheap for goods, cheap to manufacture and cheap for holidays too....

[iv_cyprus]

Well...you can't imagine the impact on people, who are renting places here (like me) and don't get salary or pension in a foreign currency...my rent has increased with ~120TL for just two months (property has generally quite low rent, due to me, knowing the landlord well). If this keeps going up, probably in two more months, the rent will increase with something like ~250TL. Not cool, but what can we do about it...

[Barney]

Perversely, Erdogan's interference will be a positive for the Turkish economy.

All central banks are in a race to the bottom in trying to devalue their currencies to make their economies more competitive (people will buy their goods because they are relatively cheap). The only central bank not actively looking to devalue is the FOMC but even they are stalling on a rate rise.

Having slashed interest rates to zero and beyond (in some countries the banks "pay" negative interest on deposits - which in reality means you put in £100 and get back £98) these central banks have one weapon left - QE - which is basically printing money to buy stuff in the hope of creating stimulus in their economies.

Turkey will be ok in the long run because it has a young demographic and a potentially massive home market as it modernises. The unknown aspect is what Erdogan will do to get in the way of real market forces. That's why people are shunning TLR at the moment.

But as I say - a weak Lira will boost the economy in the short run.

It really depends on the elasticity of demand. You sell more goods if your prices are low but you need to sell more of them to achieve the same income. As for the massive young home market, they tend to suck in more imports like computers and iPhones.

A weak currency helps exports. So the money coming in from abroad is worth more not less. You therefore need to sell fewer to achieve the same income. In reality you will sell a lot more because foreign markets find the goods cheap.

A weak currency harms imports so people will buy fewer foreign computers.

An entrepreneur will therefore open a computer making warehouse putting the young to work who will use the money to buy more things. This younger demographic is not hampered by an ageing population to look after (pay for)

This is how a weak currency helps the country's economy.

IF the politicians don't get involved!!!

It really depends if your lower prices resulting from devaluation can increase your income in terms of the consumer's currency not your own - which has devalued. If you devalue by 10% and exports rise by 50% your win, if you devalue by 10% and export only 1% more you lose out - it's called the elasticity of supply and demand.

As to imports, the young seem to have an insatiable appetite for iPhones regardless of price.

[Ragged Robin]

Actually those who are mainly on a sterling pension, do not benefit so much as would appear from the TL dropping against the pound because the cost of imports to the TRNC increases and prices in the shops have increased before any benefit is felt, and they do not go down again when the currency changes! Not to mention transfers of currency being outweighted by exorbitant bank charges. Also many UK pensions increases are tied to the UK cost of living, and the col in the TRNC has increased out of proportion due partly to an increased expat population and theiir expectations. When I sympathise short term with those living on income in Lira at least mainly they are working and have the hope of future increases in income, whilst those dependent on pensions face a bleak future,

However I would advise anyone seriously considering repatriation to consider the cost of ageing above all. Not only do medical expenses increase with age, but everyone reaches the stage when strength declines and cost saving measures (such as walking instead of using the car) are no longer an option, and one has to pay people to do work in house and garden that one could have tackled oneself when younger.