Turkish economy

[David]

Will the Turkish economy ever get back on its feet 3,80tl = 1$ ..... economists said a few weeks ago that it could get as bad as 3.40tl !!!! ....... 2.73tl =1$ a few weeks ago

[Hedge-fund]

I think capital controls are on the way. Be wary of having significant funds in Turkish banks.

[David]

Capital controls ?

[Jonesygirl]

What kind of controls? Do you mean for those with Turkish lira accounts or sterling accounts ....Or any account you hold with a Turkish bank? Can you explain further please?

[David]

3.86tl=1$ today as the tl continues to weaken

[Hedge-fund]

There is increasing talk in the money markets of capital controls in all Turkish banks.

This would mean limits on the amount of withdrawals and a freeze/limit on transfers out.

I would advise anyone with substantial funds in Turkish owned banks to consider the effects and act accordingly.

This is purely a personal view - but I've moved 80% of my Turkish bank funds out of the country.

[waz-24-7]

My View is that Capital controls will not happen. The talk has been banded about for many months.
Essentially the government of Turkey will prohibit large withdrawals of currency from Turkish banks in order to maintain a level of fluidity in the banking system. Much the same way that the ROC did years ago after the collapse of that rather small economy.
Whilst the Turkish economy is under pressure it is very large and well funded. Other currencies are also weak so the pressure on currency is currently well spread. Sterling is one such but the UK economy remains on the post 2008 wave.
Most recent developments towards an outcome in Syria, ISIS containment successes and possibly the talk of a Cyprus solution or referendum are positives. Of course Turkey still has its own internal issues and these must be resolved in order to attract continued investment and confidence.

[Hedge-fund]

I work in the futures market which essentially looks to what is going to happen over the following 2 years.

18 months before the ROC collapse I told friends in the south to get their money out of the banks. They are still grateful to this day.

The Turkish economy is in a very bad way and is getting worse. The central bank is stymied by the president so it cannot attempt to voluntarily deal with the issues. US interest rate rises this year will add to their problems. Don't just take my word for it - the rating agencies recently downgraded Turkish Government Bonds to junk status.

I wouldn't usually repeat advice on here but waz has volunteered an opinion which, going by his hook line and sinker acceptance of project fear, is based on nothing..........and we are talking here about real people and their real money.

[jacob]

I took my money out, I think you are very wise hedge-fund

[David]

3.91tl=$1 now

[waz-24-7]

I work in the futures market which essentially looks to what is going to happen over the following 2 years.

18 months before the ROC collapse I told friends in the south to get their money out of the banks. They are still grateful to this day.

The Turkish economy is in a very bad way and is getting worse. The central bank is stymied by the president so it cannot attempt to voluntarily deal with the issues. US interest rate rises this year will add to their problems. Don't just take my word for it - the rating agencies recently downgraded Turkish Government Bonds to junk status.

I wouldn't usually repeat advice on here but waz has volunteered an opinion which, going by his hook line and sinker acceptance of project fear, is based on nothing..........and we are talking here about real people and their real money.

Your advice is noted but your plunge for the panic button offers little solution for a typical hedge fund gambler's panic. Surely you saw this 2 years ago as you portray? Or even a few weeks ago possibly? Is that not what you do? I think HF you are indeed the "project fear"
Do you suggest....Take tl out from the banks and put them under the bed? Cash tl in for sterling and swallow the massive losses? Leave TRNC as quick as possible as its about to self destruct? The TRNC has a level of autonomy from mainland and my advice to people is don't panic as HF clearly is. Turkey is not Greece or Italy or ROC.
On another note: "project fear"
If you read my posts PRE BREXIT. My warning about sterling collapse have proved correct. The effects of BREXIT, I stated will initially be sharp. As they were within my predicted hours of the result. Markets have recovered on basis of intrinsic post 2008 economic buoyancy. This is good news certainly and better than I expected. Now we await the BREXIT deal and how the economy and markets react to that deal.
The BREXIT analysis that HF appears to think is all over is very far indeed from being even close to completion. In fact it has hardly started.

[Gozoa]

It is paranoid people removing their money that is the cause of the currency issues in the first place. They encourage others to do the same and the problem compounds, others see the decline in price and more follow suit.

However, Turkish government ruled out capital controls in July last year because they have 43Billion USD available to prop up the FX market and they can also adjust interest rates. Capital controls are a long way away and there will be many more signs before they are implemented, it is simply premature, unnecessary and to be frank somewhat paranoid to start action now.

I don't know where you got the information that they will introduce Capital controls but I assume you cannot provide any evidence from an official source to back up such a claim? As I said, they have two more of defense before even considering such a policy.

The real question is, where will you put your money if the USD and GBP economies start to crash like in 2008, we all know it is inevitable while we are in a debt based system. The answer to that question, and there is only one right now, a decentralized store of value that can't be confiscated. Gold 2.0 if you will: Bitcoin.

[erol]

In six months from 1st July 2016 to 1st Jan 2017 the TL lost about 14.73% against the euro.

In eleven days from 1st jan 2017 to 11 jan 2017 is has lost a further 10.5% !

[kiplet]

This is a very interesting debate.
Obviously some very experienced financial experts debating to which I am finding very interesting.
Please let us all keep this thread going in an informative way.
We all have different views that we can all learn from.

Hedge fund could you expand a little more please ?

[Bonnie]

On returning from the Uk for Christmas I needed funds to pay some bills. I went to the Garanti atm outside the big Lemar which I've used for the past 6 yrs to withdraw from my Uk bank account. I requested £300. All it would allow me to withdraw was £80. This has no reflection on my bank balance.
I went further down the road to the new Garanti ATM outside the new leather/fir shop. This time used a credit card which I keep only for emergency, requested £300 and it spat it out at me.
The previous day my other half also went to the Garanti Atm requested £150 all it would allow was £140.
Two different UK banks, two different bank accounts.
I am really puzzled, don't understand what is going on or why.
Can anyone explain please. Thanks in advance

[Keithcaley]

I'm only guessing, but if the ATM is running low on cash, it may be programmed to limit the amount that it dispenses, in order to supply as many customers as possible.

There are a few members with specialised knowledge of ATMs - no doubt we'll hear from them!

[Bonnie]

Thank you Keith for the reply. I did wonder about that, but it's never happened before. Normally just comes up on the screen only TL available. Lyn

[TRNCVaughan]

On returning from the Uk for Christmas I needed funds to pay some bills. I went to the Garanti atm outside the big Lemar which I've used for the past 6 yrs to withdraw from my Uk bank account. I requested £300. All it would allow me to withdraw was £80. This has no reflection on my bank balance.
I went further down the road to the new Garanti ATM outside the new leather/fir shop. This time used a credit card which I keep only for emergency, requested £300 and it spat it out at me.
The previous day my other half also went to the Garanti Atm requested £150 all it would allow was £140.
Two different UK banks, two different bank accounts.
I am really puzzled, don't understand what is going on or why.
Can anyone explain please. Thanks in advance

Probably loaded with £20 notes

[Hedge-fund]

I took my money out, I think you are very wise hedge-fund

Nothing to do with luck Jacob - years of reading the markets rather than listening to politicians (and many years of painful losses when not doing so!)

My prediction still stands regarding capital controls.

Also - did anyone see Cameron whispering that brexit is going better than they all predicted in project fear?

[Hammerhead]

There is increasing talk in the money markets of capital controls in all Turkish banks.

This would mean limits on the amount of withdrawals and a freeze/limit on transfers out.

I would advise anyone with substantial funds in Turkish owned banks to consider the effects and act accordingly.

This is purely a personal view - but I've moved 80% of my Turkish bank funds out of the country.

Are you in the business of trying to panic people, if you change your lira now to another currency you will lose big time

[Hedge-fund]

There is increasing talk in the money markets of capital controls in all Turkish banks.

This would mean limits on the amount of withdrawals and a freeze/limit on transfers out.

I would advise anyone with substantial funds in Turkish owned banks to consider the effects and act accordingly.

This is purely a personal view - but I've moved 80% of my Turkish bank funds out of the country.

Are you in the business of trying to panic people, if you change your lira now to another currency you will lose big time

Absolutely not Michelle and I apologise if I gave you that impression.

I gave that advice a year ago and hopefully people took action before market panic set in.

It was more a revisit to when trying to give genuine forward advice to posters was rubbished as scaremongering when the writing was very much on the wall - and of course a little nod to the brexit project fear mongerers.

[ljarvo]

Hello Hedge-fund,

We had a team of people in New York try to analyse what was going to happen to the lira against the dollar as they were investing in Istanbul. They predicted at least a 10/15 year cycle for any stability on the lira.

Many of us keep lira here for the interest - where did you move your money out of interest?

Thanks

[Hedge-fund]

Hello Hedge-fund,

We had a team of people in New York try to analyse what was going to happen to the lira against the dollar as they were investing in Istanbul. They predicted at least a 10/15 year cycle for any stability on the lira.

Many of us keep lira here for the interest - where did you move your money out of interest?

Thanks

Turkish bank rates and GBP v TLR exchange rates have cancelled each other out over the last few years ( Interest rates of 10% pa versus currency losses of 10% pa) so any money parked in lira just for the interest rate has lost 20% of its value ( inflation has been 10% pa)...........this is 'cost of carry' of the investment.

Personally I moved the money into the Uk - shares & property short term. Basically anything but bitcoin!

Anyone taking a 15 year view of lira is simply waiting to see what happens after Erdogan dies. As far as TRNC is concerned I think we will be euro denominated within a few years so I'm not going back into lira other than day to day banking & living.

[Reyntj]

I dont hold any lira either . I really cant see any light at the end of the tunnel. The turkey economy has been propped up by unsustainable measures prior to elections in 2019 . The soverereign wealth fund has been buying the turkish borsa creating a bubble . Inflation unemployment are both double figures and interest rats are too low . The lira will fall further. If the us market crashes which is likely as cape for s&p is c 35 then everywhere else will follow . Whilst it doesnt crash interest rates in u.s. Will continue to rise and the hot money flowing into turkey which they rely on will decline . Either way the lira is screwed.

Erdogan memtioned capital controls a few weeks ago the lira went down and there was a backtrack announcemet saying something like on no he didnt mean that ....

Perhaps capital controls are inevitable .