Job Discussion Forums

monkel · Joined: 29 Apr 2003 Posts: 37 Location: Australia

jan. 1 they'll be taking off the zeros so that what's now 1 million will become 1 lira.....does anyone know anything about a plan to devalue the lira at the same time, so that 1 u.s. dollar would equal 2 turkish lira?

thanks for any advice!

dmb · Joined: 12 Feb 2003 Posts: 8397

I'm not sure but I give private lessons to the President of one of the big banks and he is very worried about it(He's cancelled his last three lessons. I wonder if the two are related?)

Volodiya · Posted: Thu Oct 21, 2004 9:36 am Post subject: Devaluing the lira

Here's my two cents on this.... I lived through two of these kinds of currency changes in the FSU. The change will be disruptive enough to the population without any government "hanky panky", such as has been suggested.

An abitrary move by the government to devalue the currency would not only create instability in the banking sector (by being paid back in devalued lira for loans they had made earlier), but make it much harder for the country to repay its external debts (denominated in dollars, etc.), because the government's income (taxes) would also be paid in the new, devalued lira.

While there is a real possibility of "slippage" over time in the value of the lira after the change, it seems unlikely to me that the government would do it intentionally. All credibility with foreign lenders would evaporate and the country has been depending on the IMF for several years now, just to stay afloat.

I don't think those who are paid in lira need worry unduly, but life is full of surprises.

calsimsek · Joined: 15 Jul 2004 Posts: 775 Location: Ist Turkey

The short reply is no. In the long to mid term the gov't and expoters want the New T.L to slip against the dollar. My privet clients tell me that they expect a T.L value of around 1550-1620 agaist the green back by years end. This would mean a value of about 1.5 to 1.6 in the new year.

dmb · Joined: 12 Feb 2003 Posts: 8397

I've just come from a lesson and I brought this up with my student. I discovered he is part of a think tank that is looking into possible problems and how to solve them. He thinks business won't be bothered by it. However there may be a few weeks of uncertainty until the middle of January for Mehmet on the street.