24 Oct How to keep your wealth secure and make a profit in turbulent economic times
According to The Financial Times Turkish Lira has lost 40% of its value since the beginning of 2018. In a bid to tackle Turkey’s inflation, which was running at 25% in September, the Central Bank increased interest rates from 19.25% to 24% in September.
Protect yourself from local currency volatility
So what can savers do to protect their wealth and make a profit when there are big risks ahead for their currency or if local interest rates are unattractive or at historical lows? The easiest way to ensure that savers are well positioned in the event of a currency fall, as in the case of Turkey, is diversifying capital into a range of major foreign currencies, such as EUR, USD and GBP. In this scenario, it’s crucial to consider the following before making a decision:
- How much day-to-day involvement do you want to have
- The costs involved in making foreign currency investments
- The cost of administration fees
- Tax liabilities
The value of diversifying savings across major currencies
If we had invested 100 Turkish Lira or TRY (USD 16) in the different ways listed below at the end of 2012, what would the TRY 100 be worth today?
| Type of investment | 100 TRY investment in 2012 | Loss/gains | Value of 100 TRY in 2018 |
|---|---|---|---|
| Turkish Lira Deposit Account | 100 TRY | -2.24 | 97.76 TRY |
| Government Debt Securities | 100 TRY | -22.23 | 77.87 TRY |
| Stock Certificates | 100 TRY | -26.67 | 74.33 TRY |
| Gold | 100 TRY | +17.24 | 117.24 TRY |
| Euros (EUR) | 100 TRY | +38.24 | 138.24 TRY |
| US Dollars (USD) | 100 TRY | +55.24 | 155.24 TRY |
Vivier’s savings accounts offer higher than average interest rates and allow investors to save in a range of major foreign currencies. Our accounts offer the following:
- Very little involvement, just watch your capital grow
- Allow capital to move freely with no exchange control restrictions
- No administration fees as long as the total balance across all your savings accounts remains above EUR 6,000
- Gross interest is paid across all savings accounts
- No transfer fees and all bank charges are refundable.
So why not open an account with us today. Please follow the link to find out more about the benefits of our savings accounts.