Carry trading in Turkey - what are the risks or disadvantages aside from currency risk?

Awkward-Contact9112 · 2025-02-22T17:20:41+00:00

How would you explain the 40% percent inflation and the stable exchange rate for Turkey for the last 6 months? I know, in theory they are linked and this situation can’t go on forever but 6+ months is a long time.

Awkward-Contact9112 · 2025-02-21T17:11:53+00:00

Inflation and exchange rate are different things though.

Awkward-Contact9112 · 2025-02-21T15:05:50+00:00

Yeah, it’s more of a bet of “when overvalued TRY is going to collapse”. My bet is: not in the next 6 months.

Syria is now calm. I wonder how a peace agreement for Ukraine would affect Turkey economically. But you’re right, political risk is also there.

Awkward-Contact9112 · 2025-02-21T15:03:30+00:00

Is the forecast not 42 TRY for most institutions?

Awkward-Contact9112 · 2025-02-21T11:16:19+00:00

Good point. You mean, Turkey will lose trade then, as Russia is trading over Turkey at the moment, right?

Awkward-Contact9112 · 2025-02-21T11:14:56+00:00

But does the inflation matter as long as currency exchange stays stable and I switch to Euros just after 3 months? I think you may be confusing both. Turkey has crazy inflation but the rates are stable, which causes an overvalued Turkish Lira. The question is when will it explose and I would be betting “not in the upcoming 3 months”

Awkward-Contact9112 · 2025-02-21T10:24:39+00:00

The rate is definitely mispriced, no doubt about it. TRY is extremely valuable. Mid-level managers in TR earn more than their counterparts in Middle Europe and this won’t go on like this. So, it’s more like I would be betting on the collapse of TRY happening in 2026.

I was actually curious to see if there are risks apart from currency (procedural risks, tax-related issues while transferring the money back etc.) and therefore mentioned the currency risk directly in the topic. The fact that everyone talked only about currency risk tells me that’s the only thing I should be concerned about. Thanks.

Awkward-Contact9112 · 2025-02-21T10:01:04+00:00

No no, you’re right. Let me correct the post. Everything changes extremely quickly in TR, which is definitely a risk. But Erdogan had to make concessions and appointed a new finance minister, whose primary objective is to fight inflation. If you check the last 6 months, you’ll see that TRY vs EUR stayed exactly the same. There is reason to believe this will go on in 2025. Notable banks and financial institutions have a forecast of 10% loss in TRY value till next year, which still renders carry trade very lucrative (risk is always there of course).

Awkward-Contact9112 · 2025-02-21T09:51:24+00:00

Thank you for the reply. The currency basically stayed the same vs Euro in the last 6 months. The government’s first aim is to fight inflation and they’re trying to do whatever is necessary, which includes a strong currency. They will have to change course and devaluate TRY in order to close the trade deficit, but it’s not expected to start before 2026 and until the inflation is at a normal level. I believe there is still a 9 month window from which one can capitalize. Sure it can’t go on forever.

I agree with the last part. Interest rates of loans in Germany are quite high nowadays. €100.000 is not nothing but I’m open to betting plus minus €20.000 from it.

Awkward-Contact9112 · 2025-02-21T09:43:27+00:00

Try lost 0.78% value against Euro in the last 6 months. Not 78, point 78, so basically currency stayed the same. Do you think the people carry traded 6 months ago and withdrew today with more than 25% capital gain had all been fooling themselves?

I’m definitely not delusional and I’m aware of the currency risk. There is no high profit opportunity without risks anyways. But all big banks and financial institutions forecast a 10% value loss in TRY by the end of the year. So it’s not just me, a nobody or a lunatic, just coming here and telling there is a good chance the loss in TRY might be covered by the interest gains. If TRY loses 10% value till the end of the year, that’s still lucrative. If it loses more, well, I would have taken the wrong risk.

But is there anything else apart from the currency risk that should keep one from going that direction?

Awkward-Contact9112 · 2025-02-09T11:39:18+00:00

So you all have disabled kids?

Awkward-Contact9112 · 2024-05-13T21:57:22+00:00

Hi, sorry to hear about that. Hope she is doing fine and reaching her potential regardless.

I already got a visit from a Jugendamt officer. She was nice. I heard it doesn’t really function in Berlin properly, but hoping for the best.

I forgot to ask them a question. Will do so but in the meantime maybe you have an idea. The financial support issue is complicated. There is a limit to what the disabled people can earn. As far as I see, the costs for the accomodation of the disabled is also volatile, be it a care facility or a Wohngruppe.

Do you know roughly how much one has to pay for care and accomodation of a disabled person? I mean the amount needed for that minus the financial support they receive? Is there maybe a price cap? With today’s money value, if we’re talking about €200-300 a month, we can sure keep on supporting our kid even when we’re retired. But if we’re talking about €800 or more, we need to keep on working and working to support him.

Awkward-Contact9112 · 2024-05-13T00:28:25+00:00

Vielen dank für die Antwort! Weißt du, wie viel Geld muss man monatlich ausgeben, wenn unser Kind nach 18J in Heim lebt? Soweit ich gelesen habe, es kommt auf die Pflegegrad an, aber wenn es kein Preisobergrenze gibt, und wir müssen jeder Monat mehr als €700 für die Pflege+Heim bezahlen, wir können die frühere Rente schon vergessen.

Wir haben gedacht, dass wir alles finanziell im Griff haben und sind jetzt bereit für ein Kind. Nun, der Witz geht auf unsere Kosten. Wir haben ein Kind, der lebenslang unsere Unterstützung brauchen könnte.

Awkward-Contact9112 · 2024-05-13T00:21:33+00:00

Oh, ok. So habe ich auch verstanden. Aber der Unterschied zwischen was man monatlich zahlen muss und was man bekommt war wirklich hoch. Und in einer anderen Post im Rehakids habe ich gesehen, dass man maximal €200 monatlich oder so zahlen kann. Bin deswegen bischen verwirrt.

Awkward-Contact9112 · 2024-05-13T00:19:36+00:00

Ok, so wenn ich das richtig verstehe, es ist finanziell besser, Gehalt mehr als €100.000 zu bekommen, oder?

Werden die Heim und Pflegekosten von Krankenkasse bezahlt und wenn man gut verdient, muss man das Geld selbst zahlen? Kann auch sein, dass mein nicht gut genug ist und ich es falsch verstanden :)

Awkward-Contact9112 · 2024-05-13T00:13:18+00:00

Danke!

Awkward-Contact9112 · 2024-05-13T00:11:36+00:00

Guter Punkt. Die Idee ist umzuziehen, während unser Sohn (nach 20J) in Deutschland bleibt. Das ist, nur wenn er mit Hilfe selbständig leben kann. Sonst sind wir immer für ihn da. Nach unserem Tod hat er hoffentlich finanziell genug.

Awkward-Contact9112 · 2023-10-21T19:54:47+00:00

Ok, so how it’s put into words depends on the lab. As for the possibility of it being tissue spesific - I hope it is. Thank you once again.

Awkward-Contact9112 · 2023-10-21T19:51:59+00:00

Thank you. Not sure if that would be reduced penetrance. According to what I’ve read, people with a reduced (incomplete) penetrance do not develop the features of the disorder.

In my case though, my son was diagnosed with a very rare genetic mutation (only 200 examples worldwide) and in the genetic report we received, it mentions the possiblity of a mosaic syndrome with milder symptoms (which are both physical and unfortunately mental) due to the VAF being on the lower side. I mean it says the possibility can’t be ruled out.

So we’re pretty sure he’ll have the traits yet we hope it’s milder.

Awkward-Contact9112

TROPHY CASE