Kibkom North Cyprus Forum

17.61

17.82

17.81

I predict 20tl to £1 next week or at least before Christmas. If holding small amounts of Lira spend asap on long lasting products; liquor, beer, pasta, laundry stuff, etc, etc, before the supermarkets catch up with Lira inflation prices.
PS Fill the car up!

I read in kibris gazette a call for a hike in rental tax for foreign currency and a reduction for tl. Last time they imposed soft capital controls in 2018 on rents for foreign currency contracts by making them exchangeable into tl at a fixed rate lower than the prevailing exchange rate. I guess that's a likely option on the table.

https://www.kibrisgazetesi.com/m/kibris ... 21516.html


Inevitable......

Rental tax increase to 16% for foreign currency contracts

Fixed exchange rate for 3 months
10 11 12 $ € £........c 33% haircut for £ at current volatile rate!!

I'm not sure if this benefits the citizens on the whole because most of the landlords are citizens ...and most citizens own property or rent in tl . I don't know 1 citizen who rents in £/$. It's mostly foreign students and foreigners who pay the £/$ rents . Imo they should just offer this to citizens ? Or maybe include mainland Turks . Because for example the many African students income source is not tl so they all just got a big discount and are unaffected by tl volatility and in doing so they have reduced the income of the citizen landlords....?? An own goal?

Also just as the country opened up to foreigner buyers interfering with the rental FX laws and tax is a disincentive to buy £/$ priced property . Another own goal 2-0! Desperate measures for desperate times.

So after hitting a high of 18.3tl to the pound earlier today the Turkish central bank intervened by buying TL with USD reserves (of which it has next to none already) leading to a sudden plunge from 18.3 down to 16.9

Three hours later and it is back to 17.6

More madness on top of madness from what I can see. Not good.

https://www.xe.com/currencycharts/?from ... Y&view=12H

https://www.ft.com/content/b4d5f2e2-f19 ... d91bbbea31

The FT article linked in my post above may be pay walled so here it is copy pasted

------------------

Turkey intervenes in currency markets in attempt to stem lira plunge
Strong rally follows central bank’s vow to halt ‘unhealthy price developments’

The lira tumbled to a record low of TL13.87 against the US dollar earlier on Wednesday, a decline of 46% compared with where it started 2021, before the announcement sparked a strong rally © REUTERS

Laura Pitel in Ankara AN HOUR AGO

Turkey has announced a return to a contentious policy of intervening in the currency markets in an attempt to steady the tumbling lira, despite a previous commitment not to do so and limited foreign exchange reserves.

The country’s central bank said in a press release that “unhealthy price developments” had prompted the decision to sell hard currency such as US dollars in an effort to support the lira.

Its move comes after the lira tumbled to a record low of TL13.87 against the US dollar earlier on Wednesday, a decline of 46 per cent compared with where it started 2021. The announcement sparked a strong rally, with the currency strengthening to around TL12.5 in London dealings — later trimming some of its gains to sit at TL13.2 to the dollar.

Turkey’s intervention marks the resumption of a highly controversial policy that saw the country burn through tens of billions of dollars of its foreign currency reserves in 2019 and 2020 in an ill-fated attempt to prevent the lira from losing value as the central bank slashed interest rates.

The country’s net reserves excluding funds borrowed through so-called swap arrangements with local banks and other central banks are estimated at minus $46.8bn, according to Goldman Sachs. Gross reserves were $128.4bn in the week to November 19, the Wall Street bank said.

Central bank governor Sahap Kavcioglu said in October that the bank did not plan to return to currency interventions, which had drawn strident criticism from Turkish opposition parties as well as international investors.

But the lira has plunged through a succession of record lows as the bank has repeatedly cut interest rates despite inflation of almost 20 per cent. President Recep Tayyip Erdogan has signalled that more rate cuts will follow.

---------------

Insanity

Are there demonstrations in Turkey?

Unsustainable; George Soros maybe doing what he did to the £ in 1992, now trying his luck with the TL in 2021? Maybe 'short' of a few bob after a couple of decades of lavish living!!!

erol wrote: ↑

Wed 01 Dec 2021 12:44 pm

So after hitting a high of 18.3tl to the pound earlier today the Turkish central bank intervened by buying TL with USD reserves (of which it has next to none already) leading to a sudden plunge from 18.3 down to 16.9

Three hours later and it is back to 17.6

More madness on top of madness from what I can see. Not good.

https://www.xe.com/currencycharts/?from ... Y&view=12H

https://www.ft.com/content/b4d5f2e2-f19 ... d91bbbea31

This unusual volatility always amazes me because the Central bank announcing it is buying Lira and selling Dollars was on a very small scale in terms of currency intervention. How the currency market moves from 18.30 ish to 16.70 ish and then back to 17.50 ish in a matter of minutes is not fuelled by demand and supply. someone somewhere wants to thrash the Lira and someone somewhere is making a killing on these volatile price fluctuations.

Saddique wrote: ↑

Thu 02 Dec 2021 12:10 am

erol wrote: ↑

Wed 01 Dec 2021 12:44 pm

So after hitting a high of 18.3tl to the pound earlier today the Turkish central bank intervened by buying TL with USD reserves (of which it has next to none already) leading to a sudden plunge from 18.3 down to 16.9

Three hours later and it is back to 17.6

More madness on top of madness from what I can see. Not good.

https://www.xe.com/currencycharts/?from ... Y&view=12H

https://www.ft.com/content/b4d5f2e2-f19 ... d91bbbea31

This unusual volatility always amazes me because the Central bank announcing it is buying Lira and selling Dollars was on a very small scale in terms of currency intervention. How the currency market moves from 18.30 ish to 16.70 ish and then back to 17.50 ish in a matter of minutes is not fuelled by demand and supply. someone somewhere wants to thrash the Lira and someone somewhere is making a killing on these volatile price fluctuations.

Begins with E and ends with rdogan.

Back to 18 tl to pound.

That was a billion USD or so of hard currency well spent then !

And now new all time low vs gbp. 1 billion usd for couple of days 'relief'

Is that a billion that he hasn't got?

Forecast doesn't look good.

Pound to Lira forecast by day.
Date Weekday Min Max Rate
03/12 Friday 18.06 18.60 18.33
06/12 Monday 18.06 18.60 18.33
07/12 Tuesday 18.06 18.60 18.33
08/12 Wednesday 18.60 19.16 18.88
09/12 Thursday 18.40 18.96 18.68
10/12 Friday 18.95 19.53 19.24
13/12 Monday 18.93 19.51 19.22
14/12 Tuesday 19.08 19.66 19.37
15/12 Wednesday 19.22 19.80 19.51
16/12 Thursday 19.80 20.40 20.10
17/12 Friday 20.39 21.01 20.70
20/12 Monday 20.92 21.56 21.24
21/12 Tuesday 21.07 21.71 21.39
22/12 Wednesday 21.33 21.97 21.65
23/12 Thursday 21.39 22.05 21.72
24/12 Friday 21.38 22.04 21.71
27/12 Monday 21.50 22.16 21.83
28/12 Tuesday 21.59 22.25 21.92
29/12 Wednesday 21.54 22.20 21.87
30/12 Thursday 21.36 22.02 21.69
31/12 Friday 21.57 22.23 21.90
03/01 Monday 21.67 22.33 22.00
04/01 Tuesday 21.46 22.12 21.79
05/01 Wednesday 21.43 22.09 21.76

Trying to be King Canute never ends well. You can’t buck the market & if you try, don’t double down

What on earth is he trying to achieve?

frugal90 wrote: ↑

Thu 02 Dec 2021 5:59 pm

What on earth is he trying to achieve?

Growth and worry about the inflation later.

Pretty much the same plan the entire worlds central banks have be pursuing since the 2008 global crash by printing more and more money. He is just at the extreme end of the spectrum but everyone is doing the same to some degree or other. It will not end well imo.

The Tl printing press machines must be in full flow, welcome back to the Wiemar Republic! Russia on the verge of invading Ukraine, WWIII looms, nothing is ever learnt by previous historical events!!

I have Ukraine friends here in TRNC, and I must say they are not as chipper as they have been in the past and avidly watch Ukraine TV.

frugal90 wrote: ↑

Thu 02 Dec 2021 5:59 pm

What on earth is he trying to achieve?

Inflate the pain out of the debt.

Where next?

December 10, 2021
1:24 PM EET
Last Updated 8 hours ago
Rates & Bonds
Turkish lira slide triggers fresh central bank intervention
By Ezgi Erkoyun and Daren Butler





3 minute read
Turkish lira banknotes are seen in this illustration taken in Istanbul, Turkey November 23, 2021. REUTERS/Murad Sezer/Illustration
Turkish lira banknotes are seen in this illustration taken in Istanbul, Turkey November 23, 2021. REUTERS/Murad Sezer/Illustration

Register now for FREE unlimited access to reuters.com

Summary
Central bank announces intervention for third time in two weeks
Erdogan endorses monetary easing to drive economic growth
End-year annual inflation seen at 23.85%
ISTANBUL, Dec 10 (Reuters) - The Turkish Central Bank said it intervened in the foreign exchange market on Friday to sell dollars as the lira again neared a record low on persisting concerns about President Tayyip Erdogan's low interest rate policy.

It was the third time in 10 days that the bank announced an intervention, despite depleted reserves, due to "unhealthy price formations". The previous two moves were last week and kept the lira below 14 to the dollar. read more


The lira stood at 13.88 to the U.S. currency at 1118 GMT, 0.55% weaker than Thursday's close. It had weakened as far as 13.95 in midday trade before the intervention, close to its all time low of 14.00 hit last week.

The Turkish currency has lost 46% of its value to the dollar this year, fuelling inflation in an economy which depends heavily on imports.


A central bank survey of market participants on Friday showed one of the biggest ever monthly rises in expectations for inflation.End-year consumer price inflation was seen at 23.85%, up from a forecast of 19.31% a month earlier.

But Bluebay Asset Management's Tim Ash, a veteran Turkey watcher, said the figures were "a lagging indicator at the best of times. I would be surprised if end-year inflation is this low."


Investors are concerned about recent aggressive monetary easing under which the central bank has slashed its policy rate by 400 basis points since September. Inflation jumped to a three-year high of 21.3% last month. read more

Erdogan has repeatedly advocated for the rate cuts as he promotes a new economic plan prioritising economic growth, production and exports, despite widespread criticism of the policy from economists.

He said after a cabinet meeting this week that financial market volatility will eventually stop, blaming price increases on greed and import prices. L8N2ST5A1

Data on Friday showed the unemployment rate fell 0.2 points in October to 11.2%, but a seasonally adjusted measure of labour underutilisation rose 1 percentage point to 22.8%. read more

Ratings agency Moody's said this week Turkey could see consumer price inflation exceed 25% in coming months, with another potential interest rate cut in December adding to upside risks for its forecasts.

The central bank's rate-setting meeting is on Dec. 16.

Moody's also said currency weakness had boosted dollarisation, though so far "confidence in the banking system remains strong with no signs of deposit withdrawals."

The latest central bank survey showed economic growth was seen at 9.9% this year and 4.1% next year.

The major problem in this economic experiment over and above that it goes against all known economic theory is that turkey needs to import basic materials to export as opposed to China who has an abundance of everything.

The western media has double standards when reporting on turkey. When trump regularly called for lower interest rates it was hardly mentioned ....but when erdogan says it it's interference with the central bank and weakening their independence ...clearly erdogan has now taken this to a worse level.

But another example is we have global inflation and countries like the UK won't increase the interest rates....all this b.s. about transient inflation the likes of the uk are keeping rates lower than they should be to boost growth at the expense of inflation and the figures the UK produce on inflation are about as trustworthy as turkeys.....does anybody believe inflation in the UK is only 6.8% ....the government are hoodwinking the public ...

19Tl bank-mid rate today

Japanese bank Nomura have issued a report which details a 5 point plan . It offers some rationale to what's going on.

The points are something like:
1. New minimum wage state aid package
2. Interest rate cuts/credit growth
3 central bank/public bank intervention USD/try
4.foreign policy event
5. State of emergency

Then early election first half 2022. They are predicting 16 try to usd and heavy weekly intervention.by the central bank intervention until an election . This is their take on the situation and seems to make some sense. Heres the link https://www.yenicaggazetesi.com.tr/mobi ... 92773h.htm

Worth a read imo . I don't think the actual.nomura report is politically motivated it's more about their view on the Turkish lira and how to trade it. There are various permutations on what will unravel.

Another rate cut just announced - and through 20 we go.

Insane.

£50k now gets you 1 million lira.

Remember when it was 5,000tl for an iced lolly or ice cream, at least it was up in Bodrum

Pound a pint today!

1 Pound sterling now equals 22.40 Turkish lira. When will it stabilise?!

Its just crazy! Yesterday I went to change some Sterling to TL, before I left I checked with XE.com what I might get, by the time I got to an exchange shop I got 1100 TL more than I thought I would get, good for me but not for the locals.

What odds 25TL by the 25th...?

You'll be needing a wheelbarrow to carry the TL cash - like they had to in the Germany in the depression, in the 1920/30's

Blimey. I got over 23TL to 1GBP at lunchtime, now it is down to 19.28 using Revolut.

WHATS HAPPENED ?

What’s happened tonight , the exchange is all over the place , what’s been said or done to create the flurry of rates ?

Saddique wrote: ↑

Thu 02 Dec 2021 12:10 am

erol wrote: ↑

Wed 01 Dec 2021 12:44 pm

So after hitting a high of 18.3tl to the pound earlier today the Turkish central bank intervened by buying TL with USD reserves (of which it has next to none already) leading to a sudden plunge from 18.3 down to 16.9

Three hours later and it is back to 17.6

More madness on top of madness from what I can see. Not good.

https://www.xe.com/currencycharts/?from ... Y&view=12H

https://www.ft.com/content/b4d5f2e2-f19 ... d91bbbea31

This unusual volatility always amazes me because the Central bank announcing it is buying Lira and selling Dollars was on a very small scale in terms of currency intervention. How the currency market moves from 18.30 ish to 16.70 ish and then back to 17.50 ish in a matter of minutes is not fuelled by demand and supply. someone somewhere wants to thrash the Lira and someone somewhere is making a killing on these volatile price fluctuations.

More very suspicious Fluctuations in the market IMO , it was 1 GBP buys 23.12 TL at one point for a while then around 8.45 PM local time after Erdogans speech , The Lira appreciated to around 16.50 in a space of 30 minutes......Most local prices here i have noticed have adapted to the recent Lira drop and things have been re priced higher accordingly......Now the Lira stands a bit firmer so that's at least some welcome relief for the local economy....but for how long is the question.

15.85 TL to the pound 08:40

TML

17.79 TL to £ just now. Heading back "up" again?

Saddique wrote: ↑

Tue 21 Dec 2021 4:06 am

Now the Lira stands a bit firmer so that's at least some welcome relief for the local economy....but for how long is the question.

Government guarantees that buck market forces generally go horribly wrong but we shall see.

As someone said if it wasn’t for the misery it’s causing tens of millions of people this is an interesting economic experiment.

Smoke and mirrors from Turkey, Lira depreciates 8% against $ today, now 17 to £; mid-rate.

Erdogan will not succeed where King Canute failed.

Once this short term money print stops we will return to market value which is mid 20s to the pound at the moment.