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Turkish lira 'recovering against the pound'

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Turkish lira is recovering against the pound

The performance of the Turkish lira against the British pound has been picking up in recent times, analysts have noted.

According to HSBC, the currency had slumped against sterling earlier in the year, due to investors around the world becoming increasingly risk averse.

However, the organisation noted that interest rates in Turkey are relatively high, which means savers have been able to get higher returns.

James Yerkess, head of FX at HSBC, added that Turkey's economy has also been doing quite well when compared to many other European countries.

This has also helped to boost the fortunes of the lira, he stated, as well as changed people's views on transferring money to less established economies.

"Attitudes towards emerging market currencies have improved as investors see them as an attractive diversification choice amid growing nervousness regarding the euro and US dollar," Mr Yerkess commented.

This coincides with a positive appraisal of the Turkish economy from Martin Raiser, director of World Bank Turkey.

The Anatolia news agency quoted him as saying that the existing budget gap and level of inflation is within acceptable margins, which means there is no cause for alarm.

Furthermore, he said recent indications that economic growth is slowing down are perfectly normal.

"If you want the economy to rebalance, then a decline in growth is inevitable," Mr Raiser commented.

World Bank Turkey is predicting that gross domestic product in Turkey will go up by about three per cent this year and four per cent in 2013.

The country could therefore represent a good option for those who wish to tie up their money in European assets, such as real estate, without being directly hit by the eurozone debt crisis.

Mr Raiser added that Turkey's economic growth is "in line with a soft landing and rebalancing scenario", but acknowledged there are risks in the international economy right now.

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