Although sterling has been jittery even since a referendum was announced by the British Prime Minister David Cameron back in February, to decide whether or not the UK would continue to be a member of the EU, the currency’s slide became much more dramatic following the result, which saw a majority of the British electorate vote in favour of leaving the European Union.
Since then, sterling has been suffering the consequences of that decision with the Sterling to Turkish Lira exchange rate falling below the 4TL benchmark for the first time in more than a year.
Sterling suffers from Brexit result
With increasing uncertainty and volatility in the money markets following the vote to leave Europe, combined with the subsequent political turmoil, the British pound hit a fresh 31-year low of 1.32 against the dollar on Monday, as UK banks took a pummelling.
There is also talk that the Band of England will cut interest rates by a quarter point by August, which would take the rate to 0.25%, a new low.
Reports in the financial press said British taxpayers would lose billions as a result of the Brexit crash.
Currency traders spooked
Sterling has been wobbling for the last few weeks, ever since currency traders became spooked by the possibility of a Brexit vote.
Over the last two months sterling had already started on a downward spiral from a high of 4.38TL in May to 4.20TL by close of business on 17th June, hovering around 4.17 – 4.20, until Brexit seemed inevitable.
Since then, sterling has fallen even lower and while the political turmoil continues it is anyone’s guess when and if things will get better, at least in the short term.
Currently hovering around 3.88 (it dropped below 4TL last Friday, the day after the referendum) it is not yet clear what will happen in coming weeks and months.
What does it mean to your pocket?
If you exchanged a £100 in May when £1 was worth 4.28TL you would pocket 428TL but the same amount this week would only get you 388TL, a loss of 40TL.
Conversely, if you are buying sterling you now will get more for your Turkish Liras.
You can follow the latest exchange rates in our widget on the right column of Fethiye Times.