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Turkey Hikes Rates


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HOLA441
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HOLA445
Guest TheBlueCat

It's really strange that any country would try this given the history of failed attempts to prop up currencies using the base rate. I wonder if there's something else going on in the background?

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HOLA446

They have probably decided investment is better for the economy than consumption. Increased rates means people save instead of consume and banks lend to business and enterprise instead of to people who want to buy imported plastic tat. Hence business grows and people get wealthier.

Or you could believe Keynes and decide that everyone spending all their money on imported rubbish will make them rich. I guess if you are really motivated you can manage to believe that obvious clap trap.

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Or you could believe Keynes and decide that everyone spending all their money on imported rubbish will make them rich. I guess if you are really motivated you can manage to believe that obvious clap trap.

Have you ever read Keynes because I don't recall him saying that at all.

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HOLA449

Thats funny India have put theirs up from 7.75%

http://www.bbc.co.uk/news/business-25923743

To 8% :lol:

Except that makes 3 rises since July. From 7.25%.

Brazil too has raised from 7% to 10% from the Summer.

Emerging Markets are strengthening their currencies after huge sell offs.

Edited by Killer Bunny
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HOLA4411

Can I state this isn't a panic measure, it's a decision in which a great deal of thought has gone into it.

If I was an orthopedic surgeon specialising in repairing jerked knees, I would be offering my services to the Turkish Central Bank and Government

I wouldn't, however, be taking payment in Lira, only £££

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HOLA4412

It's really strange that any country would try this given the history of failed attempts to prop up currencies using the base rate. I wonder if there's something else going on in the background?

I was thinking pretty much the same thing. Given that it didn't work, for very long, for a bigger more stable less corrupt etc nation like the UK....why would they think it would do the trick in Turkey. In fact wouldn't such a huge rise merely make the market 'smell' blood and actually have an effect of accelerating Turkeys unravelling?.......

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HOLA4414

I was thinking pretty much the same thing. Given that it didn't work, for very long, for a bigger more stable less corrupt etc nation like the UK....why would they think it would do the trick in Turkey. In fact wouldn't such a huge rise merely make the market 'smell' blood and actually have an effect of accelerating Turkeys unravelling?.......

Based on the overnight currency move.....I was 'right'? - much more quickly than I thought. The exchange rate of the lira is back to where it was pre-rate hike.

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HOLA4415

They have probably decided investment is better for the economy than consumption. Increased rates means people save instead of consume and banks lend to business and enterprise instead of to people who want to buy imported plastic tat. Hence business grows and people get wealthier.

Or you could believe Keynes and decide that everyone spending all their money on imported rubbish will make them rich. I guess if you are really motivated you can manage to believe that obvious clap trap.

I've just had an email from a Turkish company that is dumping stock at huge reductions - is this a coincidence?

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Except that makes 3 rises since July. From 7.25%.

Brazil too has raised from 7% to 10% from the Summer.

Emerging Markets are strengthening their currencies after huge sell offs.

And S Africa raises too...

Clearly a concerted group effort to avoid massive outflows of capital. If it were just one they'd never manage. But all of them?

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