Turkish residents are losing faith in the local fiat- Lira, as Reuters has reported an increased dumping of Lira for dollars/gold due to inflation.
According to the report, published on August 14th, over $7billion worth of gold was purchased by Turks in a grand bazaar sales in just a Fortnite.
As a lot of Turks' rushed to get as many gold bullions as their savings could afford, the price of gold appreciated by $0.1366 within 10 minutes of the grand sale.
Despite market intervention and the introduction of some monetary policies to bring stability to the economy, Turkish residents' fears have not been allayed. Instead, the Lira value has plummetted to new lows, almost justifying the panic buying of gold/dollars as a safe haven.
Another reason for the Turks swapping their Lira for gold and dollars is the rising inflation rate, which is currently at 11.8%, higher than the rate of savings. This situation means that individuals who still retain their savings in banks will have a negative interest rate at the end of the year, if things continue on this downward spiral.
So what could be responsible for this currency crisis? For one thing, the Turkish economy is import-dependent. Considering that the recent pandemic has impeded global trade, a balance of payment disequilibrium is looming and could lead to possible devaluation of the Lira.
These events could mean that mass adoption of bitcoin may soon happen in Turkey if the confidence of the Lira is not restored.
Source: Cointelegraph
