Kibkom North Cyprus Forum

Base Rate cut from 24% down to 19.75% apparently due to "a moderate recovery in the economic activity" says the Central bank.

This will affect the TRL savings Deposit rates .

And to date since the announcement on the 25th, the TL has strengthened against the pound, euro and dollar. Not by massive amounts but so far the market response to the rate cut has been positive for the TL's strength. Of course this is still 'early doors'

Double painful then for those who converted sums of sterling to TL. Less interests on your TL deposits and less pounds if you were to sell back from TL to sterling

what your saying doesnt make sense . Only recently have depositors being getting rates of 20 % a year ago it was only 10 or less . Anybody investing recently will be quids in i know two peoplewho sold sterling a few minths backat 7.70 and in a short matter if time will have had made around 10 % plus interest of around 2 % a month .theres no pain for anybody holding tl as the tl rate decreases so what your saying doesnt make sense .

Exactly what I said would happen a few days ago high interest rates will soon be gone.

Reyntj wrote:what your saying doesnt make sense . Only recently have depositors being getting rates of 20 % a year ago it was only 10 or less . Anybody investing recently will be quids in i know two peoplewho sold sterling a few minths backat 7.70 and in a short matter if time will have had made around 10 % plus interest of around 2 % a month .theres no pain for anybody holding tl as the tl rate decreases so what your saying doesnt make sense .

Again with the caveat this is still very 'early doors'

Just before this rate change how much interest you get on TL deposits were higher than after it. Just before this rate change how much Sterling you would get for each TL you changed was higher than after it. That is all I am saying with the caveat that this may well change and probably will but to date that seems to be the effect of the rate change on those two things (how much interest you get on TL deposits and how much sterling you get for each TL changed).

This is somewhat atypical as I understand it. It would be more normal for a rate cut to weaken a currency vs other currencies, rather than strengthen it. So far (early doors) this does not seem to have been the case with this TL base rate cut.

Reyntj wrote:what your saying doesnt make sense . Only recently have depositors being getting rates of 20 % a year ago it was only 10 or less . Anybody investing recently will be quids in i know two peoplewho sold sterling a few minths backat 7.70 and in a short matter if time will have had made around 10 % plus interest of around 2 % a month .theres no pain for anybody holding tl as the tl rate decreases so what your saying doesnt make sense .

Agree it's nonsense.

But then the only chart worthwhile when considering fx rates is the PFI chart.

The Pet Food Index.