Ears on the IMF at pushcart exchange
Güncelleme Tarihi:
by Ekrem Ekici
Oluşturulma Tarihi: Mart 18, 2009 00:00
ISTANBUL -As the tornado of the rising dollar calms down after Central Bank auctions, things return to normal at Tahtakale, Istanbul’s traditional financial heart. The currency dealers at this exchange say the potential for an IMF accord has risen
The sharp drop of the Turkish Lira against the U.S. dollar, which traded at an all-time high of 1.82 liras on March 9, has caused ripples in Istanbul’s Tahtakale, the traditional soul of finance.
Fueled by the slowdown in the Turkish economy, the need of companies to repay their dollar debts and a global search for safe haven, the greenback has gained more than 35 percent against the Turkish currency through the past 12 months. This month, it rose to as high as 1.82 liras, falling only after the intervention of the Central Bank, which has been selling $50 million a day to extinguish the flame. The U.S. dollar was trading at just above 1.70 liras yesterday, having fallen 5.6 percent from its all-time high.
Rumors of an accord with the International Monetary Fund, or IMF, also have helped, as can be observed in Tahtakale, Turkey's "pushcart stock exchange."
Walking through the Spice Bazaar, the streets to the left open to Tahtakale, the center of the pushcart stock market, where the exchange rates of the free market are still determined. On every corner of the small, dark, dead-end streets, it is possible to see crowds of dealers with mobile phones to their ears, competing for exchange or gold, shouting and negotiating.
Hanging around this surreal exchange, it is easy to realize this is a different world with its own unique rules. These dealers, numbering around 40 or 50, quickly recognize "the strangers" wandering around and firmly declare that no outsiders can join in the fun.
Contracts have no place here, as the word of the Tahtakale dealer is as good as a contract.
"We are dealing with money and outsiders are not allowed to figure out what is going on here," said one, a dealer for 39 years, declining to mention his name. "We cannot accept anyone but the dealers, so please back off."
A celebrity dealer
The "pushcart inferno" is an autonomous community, one that generates its own celebrities. Osman "Bilardo" Ataç is a popular figure for the media among the Tahtakale dealers. His nickname comes from his love for the game of pool, "bilardo" in Turkish.
As a pushcart dealer for 20 years, Ataç, 47, is considered as a reference point in Tahtakale in terms of up-to-date financial analyses.
Neither Turkey nor the world will want to remember the year 2009, Ataç told the Hürriyet Daily News & Economic Review. "The bad news coming from the United States shook both the world and Turkish markets. The recent rise of the dollar is a result of the cash demand in the global markets. I would not make any predictions for the long term. Not a single person can predict what will be coming next, given the current situation.
"We recommend investors to remain liquid for the short term," said Ataç. "But for the long term, we recommend investing in gold. There may be a massive boost in gold in the short term."
Ataç foresees the lira-dollar parity to fluctuate for a while due to the uncertainties in the global and domestic markets. "The dollar might sway in a range between 1.70 and 2 liras until the end of the year," he told the Daily News.
Hüseyin Yıldız, 57, a Tahtakale dealer for 33 years, said in order to understand the recent fluctuations in the currency, we have to go back to a few weeks.
"While the dollar was being sold for 1.75 liras, bankruptcy rumors concerning General Motors devastated everything. That is why we saw the historic high of 1.82 liras," he said.
Good news involving the IMF in the aftermath of the GM ripple managed to ease the markets, Yıldız said. "Positive statements from the government and the constructive approach of the IMF injected optimism into the market. The lira came down to a more reasonable level within the given situation.
"If an agreement is signed between Turkey and the IMF, the dollar would depreciate further. However, such an expectation might prove to be too optimistic," said Yıldız.
Fueled by the slowdown in the Turkish economy, the need of companies to repay their dollar debts and a global search for safe haven, the greenback has gained more than 35 percent against the Turkish currency through the past 12 months. This month, it rose to as high as 1.82 liras, falling only after the intervention of the Central Bank, which has been selling $50 million a day to extinguish the flame. The U.S. dollar was trading at just above 1.70 liras yesterday, having fallen 5.6 percent from its all-time high.
Rumors of an accord with the International Monetary Fund, or IMF, also have helped, as can be observed in Tahtakale, Turkey's "pushcart stock exchange."
Walking through the Spice Bazaar, the streets to the left open to Tahtakale, the center of the pushcart stock market, where the exchange rates of the free market are still determined. On every corner of the small, dark, dead-end streets, it is possible to see crowds of dealers with mobile phones to their ears, competing for exchange or gold, shouting and negotiating.
Hanging around this surreal exchange, it is easy to realize this is a different world with its own unique rules. These dealers, numbering around 40 or 50, quickly recognize "the strangers" wandering around and firmly declare that no outsiders can join in the fun.
Contracts have no place here, as the word of the Tahtakale dealer is as good as a contract.
"We are dealing with money and outsiders are not allowed to figure out what is going on here," said one, a dealer for 39 years, declining to mention his name. "We cannot accept anyone but the dealers, so please back off."
A celebrity dealer
The "pushcart inferno" is an autonomous community, one that generates its own celebrities. Osman "Bilardo" Ataç is a popular figure for the media among the Tahtakale dealers. His nickname comes from his love for the game of pool, "bilardo" in Turkish.
As a pushcart dealer for 20 years, Ataç, 47, is considered as a reference point in Tahtakale in terms of up-to-date financial analyses.
Neither Turkey nor the world will want to remember the year 2009, Ataç told the Hürriyet Daily News & Economic Review. "The bad news coming from the United States shook both the world and Turkish markets. The recent rise of the dollar is a result of the cash demand in the global markets. I would not make any predictions for the long term. Not a single person can predict what will be coming next, given the current situation.
"We recommend investors to remain liquid for the short term," said Ataç. "But for the long term, we recommend investing in gold. There may be a massive boost in gold in the short term."
Ataç foresees the lira-dollar parity to fluctuate for a while due to the uncertainties in the global and domestic markets. "The dollar might sway in a range between 1.70 and 2 liras until the end of the year," he told the Daily News.
Hüseyin Yıldız, 57, a Tahtakale dealer for 33 years, said in order to understand the recent fluctuations in the currency, we have to go back to a few weeks.
"While the dollar was being sold for 1.75 liras, bankruptcy rumors concerning General Motors devastated everything. That is why we saw the historic high of 1.82 liras," he said.
Good news involving the IMF in the aftermath of the GM ripple managed to ease the markets, Yıldız said. "Positive statements from the government and the constructive approach of the IMF injected optimism into the market. The lira came down to a more reasonable level within the given situation.
"If an agreement is signed between Turkey and the IMF, the dollar would depreciate further. However, such an expectation might prove to be too optimistic," said Yıldız.