Cheap Turkey holiday anyone? Turkey has never really been the most expensive place to go on holiday but at the moment it is particularly good value because of the Turkish lira exchange rate which has got better and better for UK travellers over the last few months.
The cause of the devaluation has been the increasingly turbulent economic situation in Turkey, particularly runaway inflation, and a souring of relations with the United states who are threatening to impose even greater tariffs on Turkish goods. As a result the lira has lost a great deal of value over the last year and has nosedived in the last 3 months.
Take a look at our exchange rate graph for the last year and it demonstrates the increase.
Between 22nd July 2017 and 21st August 2018 the Turkish lira rate increased by a whopping 61.58% from 4.5050 to 7.2790. During this period the highest rate recorded was on 13th August 2018 and the lowest was 4.3340 on 26th August 2017.
Another big advantage is buyback rates have also shot up so if you purchased your lira a few weeks ago you would get more for it now than you brought it for!
Current rates can be found on the TRY currency page.
Does this mean cheap Turkey holidays?
Well yes. Your package price might not have changed and you may have paid for it in January, but with more lira to the pound your spending money will go further. The price of food and drinks, excursions and shopping will all be cheaper and the good news is it may have a knock on effect next year because tour operators can negotiate better deals to pass on to customers (hopefully)!
If you are in a position to take a last minute holiday then you can get some good deals. Leading tour operators have seen between 60-80% rise in bookings to Turkey in recent weeks and it’s no surprise.
How long will it continue?
We headed to The Currency Club one of the UK’s leading independent foreign exchange companies to try and find out. We asked them why the Turkish lira had become so hard to obtain? Partner at the Currency Club Meera Thakkar, told us:
There has been a lot of press coverage regarding Turkey’s economic crisis and the volatility of the lira. More than 40% of its value against the US dollar has been wiped out this year which has led to some liquidity issues for some suppliers due to restricted shipments out of the country. However thankfully The Currency Club has not been affected.
We asked Meera if that was likely to continue?
The Currency Club has been fortunate to obtain healthy supplies of Turkish lira throughout this period and we have been fulfilling all our customers orders. At present, there are no signs of there being any liquidity constraints but given the situation, this is subject to change and we would notify our clients accordingly should this arise.
We wondered if there could be a situation where the currency was not available?
We can’t see this happening. This could only come about if the government decides to take a strict stance on managing the currency value by imposing exchange controls. This would most definitely have an impact for travellers if it were to be implemented however this currently looks unlikely and we expect shipments of the Lira will continue to move internationally.
So the million lira question; how long will it continue? Meera told us:
This is extremely difficult and we will have to wait and see. Turkey has accumulated an enormous debt and the tariff policy imposed by the US on Turkish aluminum and steel exports has not helped the country either. We also need to look at what impact Turkey’s situation will have on Europe. Apparently, the banks with the largest exposure to the Turkish lira are all European – BNP Paribas, UniCredit and BBVA and the amounts are significant. Further falls in the lira could potentially set off a crisis in Europe.
All this might be a help if you are looking for a last minute Autumn or Winter break and don’t forget to keep an eye on the up to the minute exchange rates.
Don’t forget though, that Turkey has been on the advisory list from the Foreign Office in recent times so it is always worth checking the Government website before you travel for any updated news.