Unrestrained inflation has a negative impact on the trust of the people of Turkey to the paper money. According to Reuters, locals are getting rid of liras, converting them into dollars, or buying gold.
Even considering market interventions and encouraging statements about currency stability, coming from the government, the trust of the local people in the lira is ever-decreasing. In the present time, inflation is 11.8% and exceeded the size of the percentages, which are presented for deposits in the banks.
In connection with this, one resident said that he invested his money in gold as an asset-refuge:
“I think this is the best investment now, so I exchanged my dollars for gold. I could take off my liras and buy gold with them, but I’m afraid to go to the bank because of the coronavirus. ”
If the government is unable to strengthen the currency, which only in 2020 fell by 20%, the fearful sentiments among the inhabitants will rise.
Predominantly, the economy of Turkey depends on imports, the pandemic has aggravated the situation and can cause a drop in the balance of payments, making the currency even more rewarding.
Unsurprisingly, cryptocurrencies are gaining a lot of popularity in Turkey. A survey of the local trade fair BtcTurk, held together with the Statistical Center of the Istanbul University, in June during the period of the COVID, the trust in Bitcoin has risen 23%, and satisfaction from the investment in the first cryptocurrency by 58%. It is noted that since February 2019, the use of BTC by Turkish investors has doubled.
