Kikapu wrote:Turks should know that the TL is not a very stable currency, and
that it could appreciate at any time. Does the Turkish Government bare any responsibility towards these investors who thought they would peg their mortgages to the Japanese Yen and the Swiss Franc to fight off high Turkish Inflation and High Interest rates, to be buried by Turkish Lira's depreciation instead ? Personally I don't think so. They made a personal choice to go with the alternative mortgages than what was on offer by Turkey. Any consolation to the Turks, many in Hungary also pegged their mortgages to the Swiss Franc against the Hungarian Forint (HUF), are too in dire straits since the Swiss Franc's vast appreciation. I'm sure many other country's citizens did similarly as the Turks and the Hungarians, I'm afraid.
Turkey's ‘yen victims' appeal for help from PM Erdoğan
Some of these “yen victims” took out loans in the Japanese currency right after the global financial crisis first erupted in the US in the summer of 2008, later spreading to other economies around the world. Compared to latecomers, their losses are even larger as TL 1 equaled almost 70 yen when they signed their mortgage contracts in early 2009 but now trades at just over 42 yen. That is almost a 70 percent increase in their principal in less than three years.
Those who took mortgages in Swiss francs are no less upset these days. One franc was equal to TL 1.65 at the beginning of April but is now hovering at around TL 2.30. “That is beyond a depression for us. It is destruction, a disaster,” said another demonstrator Saturday.
They say the government and relevant financial institutions such as the Central Bank of Turkey and the Banking Regulation and Supervision Agency (BDDK) shouldn't have allowed banks to give out loans denominated in foreign currencies in the first place. What they ask is that the added cost to their debt be paid by the Treasury. “Dear Prime Minister, we are unable to repay this loan. We sold whatever we had, and now we only have our lives. How are we supposed to tackle a global crisis on our own?” Sessizoğlu says.
http://www.todayszaman.com/news-254424- ... dogan.html
Only in Turkey's dream that would happen. It should have said,
"that it could depreciate at any time" rather than the above. Anyway, it has been corrected now.
Since I'm back on the subject, there is one thing the Turkish Government could be guilty of in the eyes of these investors who took out their mortgages pegged to other currencies to much more stable economies for added security, in that, the Turkish Government is always too busy telling the world what great economy they have, just because they had achieved high economic growth at times, which is not so unusual to any developing country to do so, but having had "good" economic growth is almost meaningless when you have high inflation, high unemployment, very high Foreign Trade Deficit, Negative Current Account Balance, Depreciating Turkish Lira and so on, so it is likely that these people who may only know what their government tells them that everything is rosy with the country's economy, just as how VP believes everything he is told by Erdogan, these people were basically made to believe that the Turkish economy is KING of Europe and that if anything, that the Turkish Lira would skyrocket up backed by the imaginary strong Turkish Economy, which would have made their mortgages pegged to other currencies much cheaper, because they believed they would have a very strong Turkish Lira in the future. Well, not so, and the TL this morning is at $1 = TL 1.79 when it lost about 17% against the USD in the last 2 years, and in comparison to other major currencies, the USD has lost a lot of value against some other major currencies, like the Yen and the Swiss Franc, because of USA's sluggish economy and because of Japans and Switzerland's strong and stable economies, despite Japans problems with the earthquake and Nuclear Power stations earlier this year. If the USD has lost value, what does that say about the TL in comparison, other than 17% depreciation in the last 2 years alone. TL lost 33% against the Japanese Yen in the last 2 years. It most certainly does not look very good for Turkey or it's TL currency going forward.
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