100K Euro to invest Turkish Lira

L

Leonnard

Guest
I have 100K Euro to invest and I have looked at a Turkish bank that is offering 18.25% every 29 days
only thing is you have to change your money into Turkish Lira to get this rate. Has anyone any suggestions about this. Leonnard
 
So thats over 200% a year???? That can't be right! Turkish inflation used to be crazy, but I don't think it's that high.
Sounds dodgy......remember the old mantra - if it sounds too good to be true, it probably is.
 
Euro is stronger currency comparatively, What if you have to buy Euro at higher price?

Try it out with some 40k or 50 K watch out for a year n if it still works out, atleast you'd be right/wrong. I wouldn't put all eggs in one basket!

Again, high risk high returns :~)
 
Turkey has in the past devalued the lira over-night. You could see your bet halved or more.

You may also want to consider what deposit protection there is in Turkey should a bank go belly-up.
 
Also - interest on such foreign deposits may be assessable for income tax (up to 41%) rather that DIRT (20%). So:

  1. Is the rate that you mention correct and genuine?
  2. What depositor protection applies?
  3. You are facing foreign exchange currency fluctuation risks
  4. You may be facing higher tax than on local deposit interest
 
sam h said:
So thats over 200% a year???? That can't be right! Turkish inflation used to be crazy, but I don't think it's that high.
Sounds dodgy......remember the old mantra - if it sounds too good to be true, it probably is.
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Isn't it actually over 700% aer because its compound ever month ... sounds like a scam to me , op do you have a link ?
 
Hi, My fault it's 18.25% P.A. 29 days notice is required to withdraw your investment
but you can draw down on your interest when ever you wish
here is a link www.garantibank.com
Thanks to everyone who has replied so far
 
Garanti bank are one of the main turkish banks, so it is not a scam from that point of view. The other points raised re: devaluation of the currency, forex risk, taxes, and deposit protection all still apply, though.

In terms of the political situation in Turkey, if the supreme court declares the ruling party to be unconstitutional, expect a period of turbulence (!). This may have negative effects on the exchange rate and the stability of the currency/economy.
 
Tax Benefits.It is'nt a bad idea to invest in Euros to save taxes on euros and to buy Turkish liras especially If you want to recieve an tax break.Except for the fact as per the Turkey tax laws,Your any type of income derived from old turkish liras (TRL) are non-taxable or completely tax-free money assets and on New liras (YTL), it is taxable.
 
Well,That's true,old Turkey Liras (TRL) are acceptable worldwide indefinetely being of Gold standard currency value as compared to New Liras (YTL) which is limited only to Turkey and few other countries.Both are equal in its value and exchange rate in terms of other currencies.Always remember the saying "Old is Gold".
 
HI

I work for a currency broker and i know of clients that have taken advantage of the extremely high interest rates in turkey, and currently get an interest rate of 10% p/a.

and due to the Turkish currency is very unstable he converts sterling into Turkish Lira and leaves it receiving 10% a year and when the currency moves back to a favorable rate he moves it back into his own currency.

As he is receiving 10% interest + 2% currency swings he makes a few bob.
 
How easy is it for a retail investor to do a TRY EUR hedged forward?

Which brokers would offer this option?
 
fungus said:
How easy is it for a retail investor to do a TRY EUR hedged forward?

Which brokers would offer this option?
Click to expand...

worldspreads states on thier website that they will consider any request for hedging foreign currency.

[broken link removed]
 
fungus said:
How easy is it for a retail investor to do a TRY EUR hedged forward?

Which brokers would offer this option?
Click to expand...


Yes it is pretty easy, i work for a currency broker called [broken link removed] and it has been done here a few times with great success.
 
oroborosFX said:
HI

and due to the Turkish currency is very unstable he converts sterling into Turkish Lira and leaves it receiving 10% a year and when the currency moves back to a favorable rate he moves it back into his own currency.
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So it all a gamble, based on the assumption that it will move to a 'favourable rate'. What happens if it never hits that 'favourable rate'?
 
you are right it is speculation but it all comes down to timescale and scope.

you are receiving 10% interest and if you are able to leave it there until the market moves in the right direction, but if doesn't move all the way to your desire rate you would lose a fraction of your profit but due to the interest you are more likely to be within in a profit.

as currency is not like betting i.e you will allways get back the majority (97%) of your money even if it moves against you. And if you add the interest you received, worst case scenario you are not going to be far wrong.

i am not advocating this scenario but i have helped a few people do it and it has reaped decent results.
 
oroborosFX said:
you are receiving 10% interest and if you are able to leave it there until the market moves in the right direction, but if doesn't move all the way to your desire rate you would lose a fraction of your profit but due to the interest you are more likely to be within in a profit.
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And what happens if it keeps moving in the wrong direction?
 
if it keeps moving the wrong direction you get out i.e exchange it back into euros.

you would have already specified the levels before you go into it.

So before doing anything you know your worst case and best case sceinareos,
 
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