Rising inflation is affecting the Turkish people’s confidence in the local currency: According to a recent article published by Reuters Locals convert the Turkish lira into dollars and gold.
Despite market intervention and reassuring stories about the government’s currency stability Confidence in the Turkish lira is falling drastically. Inflation is currently 11.8%beyond the interest that bank savings offer. A citizen interviewed by Reuters claims to have bought gold as a safe haven:
“I think it’s the best investment right now, so I turned my dollars into gold. I could withdraw my lira and buy more gold, but right now I’m scared of going to the bank about the coronavirus.”
The Turkish lira is expected to sell off unless the government renews confidence in the local currencywhich has fallen by almost 20% this year.
The popularity of cryptocurrencies is constantly increasing
The Turkish economy is heavily dependent on imports. The pandemic has frozen logistics chains, worsened inflation and possibly caused a payments crisis that would further weaken the local currency.
In the last few months National currencies around the world have depreciated due to inflation, increasing interest in Bitcoin– Recently, cryptocurrency capitalization surpassed Bank of America’s rating and almost reached PayPal’s.
The Turkish exchange will take place in July of this year BtcTurk conducted a survey in collaboration with the Statistical Research and Appliances Center of Istanbul University: It was found that during the COVID-19 pandemic Confidence in Bitcoin increased 23% and satisfaction was 58.5%.
From February 2019 until today, the use of cryptocurrencies in Turkey has doubled.