North Cyprus Consumer | Lira to Break 3.70TL/£1 Barrier?

North Cyprus Consumer | Lira to Break 3.70TL/£1 Barrier?North Cyprus Consumer – Turkish Lira to Break 3.70TL/£1 Barrier?

Even as I write, I know it is going to happen, one pound will buy 3.70 Turkish Lira. Even before the corruption scandal in Turkey, pundits were predicting 3.50TL/£1 in 2014. I know of  many ex-pats who thought they were being sensible converting their savings into 8% Turkish Lira accounts when the exchange rate was around 2.6-2.8TL/£1, expecting the lira to return to 2.2-2.4TL/£1 and then to add another 10-15% to their saving on top of the standard deposit rate. Now, many have lost up to a third of their savings in a few months and are wondering whether they should cut their losses and run?

One investor I know did that early on, taking a 10% loss when it was 3.10TL/£1 and had to be satisfied that the interest they had earned on their savings partially compensated for this loss. Now, they are amazed at their luck which stopped them losing another 20% of their savings. But what now they are asking, as the Clash song goes, “Should I Stay Or Should I Go?”

It is expected that today the Turkish Lira, barring more disasters in Turkey, will pull back from its flirt with the 3.70TL/£1 psychological barrier but for investors should they hold on and assume the worse is now over? In truth, no one really knows but the truth is that investors are pulling their money out of Turkey. For example, according to Money Week, “global investors’ holdings of Turkish equities and state debt have fallen by 33% and 27% respectively since May” so perhaps ex-pats should go with the experts and at least return part of their investment to a sterling account, or any other currency in the case of non-Brits.

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