Expats who rely on income from the UK have been better off in Turkey than those living in Spain, France or any other Eurozone country, thanks to the Turkish lira being more stable than the Euro since the credit crisis of 2008 – a trend likely to continue in the foreseeable future.
Historic exchange rates show that movement has been considerably less volatile between Sterling and the Turkish lira than between Sterling and the Euro during the last six years, an especially turbulent period for the economies of the UK and Eurozone.
British people living in the Eurozone saw the local value of their Sterling-based income slashed by 33 per cent between January 2007 and December 2008, when the exchange rate plummeted from £1/€1.53 to £1/€1.02. Meanwhile, for the same period in turkey_national_football_team”>Turkey, Sterling’s value against the lira fell by a comparatively low 21 per cent. And today, while Sterling’s value against the Euro is still around 23 per cent lower than pre-credit crisis levels, it has returned to its former value against the Turkish lira – good news for expats there.
Said Julian Walker at Turkey property specialist Spot Blue: “While the Eurozone has been in economic turmoil and the £/€ rate has been yo-yoing all over the place, Turkey has been busy becoming Europe’s fastest growing economy, transforming from an emerging market into a developed one. Positive outcomes for the country include a big reduction in inflation, a stronger, more stable currency and an increasing appeal to foreign investors.”
Turkey’s central bank this month slashed its key interest rates by 50 basis points as part of measures to curb the lira’s anticipated appreciation, a potential consequence of the country’s second investment grade rating by Moody’s, it’s first coming from Fitch’s last November. The lira has strengthened recently as foreign capital has flowed into Turkey, attracted by signs that the country’s economic growth will continue, helped by global easing.
Below illustrates how the £/€ and £/lira exchange rates (interbank rates) have compared at some of the high and low points since the credit crisis:
Sterling / Euro
January 22nd 2007: £1=€1.53
December 29th 2008: £1=€1.02
August 23rd 2010: £1=€1.23
July 1st 2011: £1=€1.11
July 20th 2012: £1=€1.28
February 25th 2013: £1=€1.15
Sterling / Lira
January 22nd 2007: £1=2.79lira
December 29th 2008: £1=2.21lira
August 23rd 2010: £1=2.37lira
July 1st 2011: £1=2.58lira
July 20th 2012: £1=2.83lira
February 25th 2013: £1=2.73lira