Rampant inflation is affecting the Turkish residents’ confidence within the lira fiat currency. Consistent with a Reuters recent report, the natives are dumping lira & converting it to dollars & thereby purchasing gold.
Even with market interventions and reassuring stories about monetary stability coming from the govt., natives faith within the lira is on a downwards trajectory. Inflation is presently at 11.8% and has overtaken the amount of interest offered for savings at banks. One resident was quoted as saying he bought gold as a secure asset:
“I think it’s the simplest investment for now so I converted my dollars to purchase gold, i’d withdraw my lira and buy gold with it too, but i’m scared to visit the bank now due to COVID-19.”
Natives expect more panic selling of the lira if the govt can’t boost confidence within the currency, that has dropped almost 20% within this year.
Covid-19 Outbreak Has Worsened Inflation Even More
Turkey’s economy depends totally on imports. The outbreak has worsened inflation and it’s going to also cause a balance of payments crisis, further weakening the currency.
As fiat currency like lira continued to lose value due to massive inflation, Bitcoin [BTC] market cap has reportedly to become greater than Bank of America & New Zealand’s fiat currency.
While reports of global cryptocurrency adoption in Turkey are debunked recently, the native exchange BtcTurk conducted a little survey with the Istanbul University Statistics Appliances and research facility earlier in the month of July. It found that within the coronavirus outbreak, trust in Bitcoin has increased by around 23%, while satisfaction spiked 58.5%. Usage among the Turkish audience has reportedly doubled since February last year.