kevkj

Im watching with interest how the YTL -£ is rapidly changing.

I am sure it hit 2.80 for a while last spring/summer ,now at 2.2 ,thats a big swing.

Obviously this is caused by the strong Lira and weak Pound.

Does anyone know whether the YTL is as strong against the Euro or just the Pound?

If its just the pound who knows where it will end.

If the YTL is as strong against a basket of currencies including the euro i would expect to see a devaluation of the YTL before it hurts Turkey.

Any views folks?

keny

Hello Kevkj,
Very interesting points you make with wide implications on us part-time Turks as well as those expats who depend on 'lira interest' to live.This is compounded by the intended rise in utilities bills and others estimated at 10/15%.This means for the long term visitor the cost of living will rise significantly,and pose the question... "is it worth staying in Turkey"?For the retired in turkey increases in most pensions/benefits are limited to 3/5%, and the exponential rise in fuel prices will futher fuel prices of consumables.Therefore you original question is of paramount importance as we need to move to another currency to get the most from our pound or euro or dollar in terms of lira exchange rate.Any futher comments gratefully appreciated. Keny.

marlyn

over the past few years this has been the trend, winter months lira is strong, come the summer months the lira devalues. In the last five years we have seen lira at 2.19 to the £ and 3.02 to the pound, 2.19 jan and feb 2006 (i think) 3.01 july august 2006. watching this year with interest or without interst depending on the exchange rate lol.

kevkj

Looks like we may see a drop in the currently strong YTL and get a bit more to our pound come summer.

Turkey's Central Bank warned that a ‘hard slowdown' in the global economy may drive the Turkish lira (YTL) lower, making it more difficult to cut rates. The bank dropped its commitment to a “cautious and measured” lowering, the phase it used to describe its rate cut outlook in the last quarter of 2007, in the minutes of its Jan. 17 rates meeting, released by e-mail yesterday. Instead the bank focused on the impact of a slowing global economy on Turkish inflation, saying that there was a risk of a “shock” to the YTL that might push inflation higher. Higher food and electricity prices may also increase costs throughout the economy, the bank said. The bank slowed the pace of its rate reductions at its January meeting, cutting by a quarter point to 15.5 percent after three months of half-point reductions.

“There are several factors that are driving the bank to be more cautious and to slow the pace of cuts,” said İnan Demir, economist for Finansbank in Istanbul. The bank sees a “pick-up in domestic consumption” as well as “the risk of a weakening inthe currency,” he said. Sales of new cars and a growth in consumer borrowing indicate a “moderate'” acceleration in domestic demand, the bank said. Still, a slowdown in global economic expansion could curb demand for Turkish exports and reduce total growth, it said. Consumer-price inflation ended 2007 at 8.4 percent, more than double the 4 percent goal agreed under a $10 billion International Monetary Fund lending accord.

The risk that a slowdown in the global economy might drive the YTL lower “cannot be ignored,” the bank said. Still, the cost of borrowing is still high enough to support the disinflation process, even after the bank reduced its benchmark rate by 2 percentage points in a series of cuts over five months, the statement said. Price growth will slow over the medium term, it said. That's “a solid signal that the Bank will continue to cut rates,” Özgür Altuğ, economist for Raymond James Securities in Istanbul said in a note to investors. He forecast a quarter-point cut at the bank's Feb. 14 meeting

Mushroom

I am watching the current exchange rates and did not realise that there seems to be seasonal variations as described.
If that is a trend, I will be waiting to see how the £/YTL rate alters in spring & summer of 2008 and will move currencies at what I hope is the right time if it does alter.
We do however have a problem with the £. If as expected there is a further interest rate drop in Feb 2008, our currency becomes less attracive to other currencies and unless the YTL also suffers from a similar predicament, there may not be any great changes.
Personally I blame Gordon Brown, but then in fairness I can't stand the man and would blame him for anything just now !

SEXYGIRL

Yes Kev You are certainly right,iv been in Turkey for many years and this winter the lire is very low,never seen it this low at this time with the season almost approaching,tourists on holiday will certainly find there money goes no where,when i fist went to turkey you could go into a supermarket,Tanzas and fill your trolley for 20 pounds sterling and now it goes nowhere,and electric,water,cost of living is getting a lot more,i dont really know what is the answer,i have many friends with businesses will struggle again this year im sure.I remember last summer the lire was almost 3ml to the pound so its really down.Lets just hope that spring will move currencies and be stronger,yes you are right most expats depend on their interest to partlly live on,its a big worry all around,yes i agree i blame Gordon Brown too.

Maisie

I do not really understand this money market bit. However, surely the cost of living in Turkey cannot continue to rise given the low wages of the average Turkish family. How does Turkey expect these people to have a reasonable standard of living on the wages they get? I have seen some examples of Turkish income on this forum and cannot believe how some families manage. The Turkish government must be aware that increases do not only hit British people. I do not know the answer to this, but am obviously pleased to see that there is a trend in the exchange rate winter to summer. How does this affect Turkish nationals? Anyone have any ideas? Maisie

jcrian

It's the pound that is weak.Turkish people aren't worried about the exchange rate as they only use Turkish Lira and are used to inflation.
Inflation happens in every country,We have just been abroad for a week and petrol has gone up while we have been away.The cost of everything in the UK seems to be rising rapidly.
A property we were going to buy abroad has increased by nearly a thousand pounds in the last three days as the pound is getting weaker against the euro.

kevkj

JCrian is correct its nothing to do with the UK its the strong YTL.

I really expected it to weaken slightly with the news of the incursion into iraq but it has not had much effect .

There is generally a better rate YTL-£ during the summer months but i dont think we will see 3 YTL - £ this year.

We purchased our last property in YTL last summer so were rather chuffed anyway as it cost us a load less than it would of now in eqivalent £s.