What's the Lira Going to Do Now?

stellasstar1



Joined: 02/07/2008
Posts: 1519

Message Posted:
25/06/2010 12:17

Has anyone got any predictions about the state of the lira. Do I keep my money in Sterling, or when shall I change back to Lira. I really shouldn't change from sterling to lira, as I can't bear the wait to change back again. 2.37 yesterday and now 2.35, what's the forecast????

fiendishpaul


Joined: 18/05/2008
Posts: 1720

Message Posted:
25/06/2010 15:37

Stella



I changed from Lira to Sterling about 6 weeks ago at a rate of 2.24 in the hope that the emergency budget would see the pound strengthen. Changed back up to lira yesterday at 2.34 and have made a very tidy profit



Current exchange rate sterling to lira is 2.325 at Creditwest so hopefully (for me) it is going to continue downwards.



Where were you seeing exchange rates of 2.37 and 2.35 ?? Was this definately sterling to lira ?



As to when to change up/down - only you can make that choice.



Regards



Paul

professoregit


Joined: 30/08/2008
Posts: 381

Message Posted:
25/06/2010 15:50

Sterling higher due to recent UK budget measures aimed at tackling the mountainous deficit. With regards forecast for sterling, hope it continues to improve, who knows?

malsancak


Joined: 23/08/2009
Posts: 2874

Message Posted:
25/06/2010 16:06

professoreqit, I don't think so. The drop from last year's high of 2.50 was because of the UK election uncertainty, the budget did very little to reassure the currency markets except for the few days everybody expected it to go up, until the speculators cashed in, as you did, and it is now dropping back to the low 2.30s.

Jovial_John


Joined: 31/01/2009
Posts: 1024

Message Posted:
25/06/2010 16:15

I swapped a lot of lira for Sterling on 14th May at 2.231 via HSBC online which gives a preferential rate. It crept up to 2.29 the day before the budget. The markets liked the budget so it got an immediate boost to 2.37. At this minute it is 2.36 (mid-range) so I would get about 2.35 giving me a profit of 5% or so. Not bad in 6 weeks.

I personally have decided that there is a bit of life left in it so I am holding out until 2.4. If it goes down it won't worry me because Sterling is a lot more secure than the euro and long term (maybe even 6 months) it will get there. And if I run back to lira now I will only get 7% (less tax) for the year. I also think that the UK are more likely to increase interest rates than Turkey which would give the £ a boost against the lira.

But it's all a gamble - maybe George Soros will fancy another hit on the £ - last time it dropped 18% in 1 week despite interest rates going up to 15%

catalkoykid


Joined: 15/02/2009
Posts: 1190

Message Posted:
25/06/2010 16:36

mess 6 having a bad day lol

professoregit


Joined: 30/08/2008
Posts: 381

Message Posted:
25/06/2010 17:29

Mal, yes well aware of the government uncertainty, hung parliament, etc.., and effects on STG. I was talking short term. 5 Kurus in 4 days is quite a jump and was anticipated by many. It's still hovering around the 2.35 mark and I hope it goes further. Be interested to know what your forecast is.

Jovial_John


Joined: 31/01/2009
Posts: 1024

Message Posted:
25/06/2010 17:49

It's not about where you live - it's about making money. I have friends in the UK who have a bank account in Turkey but have never lived and never will live there. They get an interest rate on Sterling that is as good as any in the UK and an interest rate on Lira that is better than here. They just get on the internet and move their money from one currency to the other and make a lot of money. They have similar set-ups in Thailand, Australia and Hong Kong to take advantage of currency fluctuations and as it is all HSBC they can move the money between countries (except Turkey) at no cost.

They do this in the home country of the currency they are interested in because the exchange rates are always better than in the UK. Nice if you have the cash spare to do it.

girne 29


Joined: 06/12/2007
Posts: 1488

Message Posted:
25/06/2010 19:03

just a point as regards interest. While it was 17% well and good,but now that its 7% after tax. Is it worth all the bother for those that dont live in TRNC. If you are resident in UK then a further 20% comes off in UK tax, leaving just 5.6% for a Lira account.

At the moment you can get an RPI linked bond in uk which gives a bit over RPI, last two months it was paying .

6.3% and 6.1%.tax free. You have to keep the money in for at least 1year. But I think its a safe bet the RPI will not go down.



As regards currency fluctuations ,it only works if you can move money several times a year. The example in message 2 works out at a profit of 5%,fine if 3 or 4 times a year but once a year 5%. not very attractive return for your risk

Also how much is lost in the buy/ sell ratio, Unless there are substantial fluctuations then the buy/sell ratio must shave a fair bit.

I suppose its how much money we are talking about 1% on £50k is different to 1% on £1million.

CJtill


Joined: 02/05/2008
Posts: 836

Message Posted:
25/06/2010 19:24

Gambling on sterling v Lira is this manner is the worst mug game available, as the spread is always going to be too big. If you want to do this properly and increase your profits considerably, at the same time reducing your potential losses, then your better off opening an account with Sporting Index and dealing direct.

Michael

Jovial_John


Joined: 31/01/2009
Posts: 1024

Message Posted:
25/06/2010 19:29

Girne 29



Selling today I make 5.2% in 6 weeks (actual but/sell rates - not mid-rates) and no tax to pay. The money came from a 30 day account and returns to a 30 day account. So I only lose interest for 6 weeks (approximately 0.7% after tax). Expressed another way, it will now take me 1 year and 6 weeks (instead of 1 year) to make 7% interest less tax - but I have additionally made 5.2% tax free.



The buy/sell ratios are quite wide on Sterling (compared say to US$) but the internet rates from HSBC are much tighter than you will get over the counter anywhere in TRNC; although I don't know about internet rates at other banks, When I made my exchange on 14th May the rate over the counter at HSBC for buying Sterling was 2.2423 but the internet rate that I got was 2.2316.

proger1



Joined: 18/04/2009
Posts: 2919

Message Posted:
25/06/2010 19:49

Or to put it another way, if you had changed 20,000 stirling into Lira 6 weeks ago it would give you 44,800 which you could get a 9.5% interest if you locked it for 6 months and after the 6 weeks which you would lose some interest for not waiting 6 months but if not it would have gained you 227.35 stirling if you exchanged it back today.

If however you had taken the same 20,000 stirling and waited till now you would get 46,800 which would be 854 stirling increase in amount albeit in stirling, not to mention you could also have gained 0.5% interest in a stirling account for the first month, you would lose any interest for the second month.

That's about 3.75 times as much without figuring in the 0.5% interest.

That's for only 20,000 but you have to bear in mind, if you need that money for an emergency you might need to change it to whatever currency you need at whatever the exchange rate is then and could end up losing out in the end.

Personally I do saving and exchange both

Paul

stellasstar1



Joined: 02/07/2008
Posts: 1519

Message Posted:
25/06/2010 22:16

Paul, I know many people rave about Credit West, but I find their rates quite low. Iktasbank were giving the rates I quoted, and the internet google search.

fiendishpaul


Joined: 18/05/2008
Posts: 1720

Message Posted:
25/06/2010 23:11

Stella



Thanks, I will have a look at Iktisatbank.



Girne 29 - Msg 9



The currency speculation is more of a sideline when the rates look favourable. When I change down to sterling, my funds are still earning 4.5% before tax and then when I change back up I get 9.75% for TL.



As for buy/sell ratios, it is normally around the 0.06 level which I appreciate is quite wide. However, TL has been sufficiently turbulent to still make a decent profit 3 - 4 times a year.



CJTill - Appreciate your point re the size of the spread, but I don't suppose Sporting Index pay 9.75% on your investment when the rates are static.



Best of luck to anyone having a punt.



Regards



Paul

girne 29


Joined: 06/12/2007
Posts: 1488

Message Posted:
25/06/2010 23:13

jovial john



I accept you can make money on currency transactions,but it depends on how often the currencies fluctuate and to what degree. What you are saying is that in 6 weeks you made 5.2%,but if you only managed that in a one six week period in say 2010 then your 5.2% is actual an annual interest, However if you could manage that 3 times a year then that would be a better return than a medium risk equity.

I didnt know that the internet rate and across desk rates at HSBC were different.In the past ,in the glory days of 18% I moved money around , from sterling to lira in HSBC, but didnt know about this difference,so thanks for that.



As for the other matter of moving money from UK to a Turkish bank ,at the present rates it would appear you can do as well leaving it in the UK..Unless you use that money on currency changes.

You could get an extra 1.4% by not declaring it to inland revenue, but unless the amount was large, I dont think the risk of being caught makes that worth it

LaptaMike


Joined: 07/10/2009
Posts: 1679

Message Posted:
25/06/2010 23:41

could be totally wrong but can't you transfer £5000 legit without declaring it? Got it at back of my mind somewhere, might have read it somewhere ages ago in which case it could be rubbish

keithcaley



Joined: 13/06/2008
Posts: 2521

Message Posted:
26/06/2010 00:32

Mike,

Actually, I think that you can transfer almost any amount that you like, but the bank will often ask what purpose it's for (money laundering regulations) and if you just say 'House Purchase' - that's the end of it!

Happened to me a few time when we were paying stage payments.

Jovial_John


Joined: 31/01/2009
Posts: 1024

Message Posted:
26/06/2010 09:01

You can transfer any amount via bank transfer in and out of most countries because it is tracked - the limits (I think £5K is correct for here) apply to cash carried with you because it is untraceable.

malsancak


Joined: 23/08/2009
Posts: 2874

Message Posted:
26/06/2010 09:29

Professoregit, my forecast for TRY-GBP, despite the feeling that it should hit 2.5 soon, is that the UK economy is fragile because the LibCon alliance is fragile and that it will start to unravel in the next 90 days. Whenever I see Cameron I hear Danny Kaye singing, "The King is in the altogether, but all together the altogether." But on the other hand, is Turkey still going to be rising a star? Despite all this, I'd grab 2.40 when it comes and wait for 2.30 to return to make a small kill. I'm not a millionaire so what do I know. My qualification, I used to write A level economics exam papers for the Oxford, Cambridge and RSA exam board. In other words, no qualification at all.



Anyone else going to make a prediction for the next 90 days - mine is buy at 2.40 sell at 2.30 - 4% return in 90 days, less expenses? Enough to live off for 90 days if you invest £100,000! So Prof, what's your 90 day gamble?

professoregit


Joined: 30/08/2008
Posts: 381

Message Posted:
26/06/2010 10:12

Mal, you sound suitably qualified to me. My "guess" is that it will peak at 2.45 and slip back slightly providing there are no shockers on the horizon, so dare I say 2.40 in 90 days. I'd really like to see it @ 2.50 but there's

wishful thinking for you. Please note all you budding Forex dealers out there, this is not a prediction, much

more of a guess from someone totally unqualified.

malsancak


Joined: 23/08/2009
Posts: 2874

Message Posted:
26/06/2010 11:23

so, prof, you'd buy at 2.40 too? What would you sell at? I used to play with a free currency trading account and became an emillionaire for a while - sticking to sterling and TL because I was keeping up with the news from those two countries. Mind you the easiest way to end up with £1m in the account was to start with £2m!

Jovial_John


Joined: 31/01/2009
Posts: 1024

Message Posted:
26/06/2010 14:23

Girne 29 - message 15



Sorry - I missed your message before.



Let's try it this way:-



From 22 weeks I have 20,000 tl earning 6.5% after tax - earnings are 550tl

I then transfer this to Sterling 20,550 @ 2.231 = £9,210

6 weeks later I convert back £9210 @ 2.35 = 21,646tl

This then goes back into savings for the remaining 24 weeks - earnings are 650 tl

At the end of the year I have 22696 tl - a profit of 2696tl or 13.5%



Slightly more because I am not calculating compound interest. So yes - my trading profit is 5.2% is annual but using the same money I have also made an additional 6.3% interest.

girne 29


Joined: 06/12/2007
Posts: 1488

Message Posted:
26/06/2010 14:52

Thanks John

Easy to follow now,nice template.