Residents in Turkey are getting scared over their fiat currency as the Lira has already lost 20% of its value this year alone.
Frequent cases of Inflation are now making Turkish residents to lose their trust in the Lira. Reuters reported on Aug 14 that residents are changing their Liras to dollars and also using it to purchase gold.
Although the government has promised residents that something would be done about the currency’s value, the pleas have fallen on deaf ears as the people are now more determined to fight for themselves. At the moment, the rate of inflation is Turkey is at 11.8% and residents are not even encouraged to save in the banks because the interest is low. A Turkish explained that he has bought gold to save his future:
“I think it is the best investment right now so I converted my dollars to buy gold, I might withdraw my lira and buy gold with it too, but I am scared to go to the bank right now because of coronavirus.”
Residents feel more Liras will be sold off for the dollars or gold if the government does nothing to improve the purchasing power of the local currency.
Problem for the Lira
One of the reasons why the Lira is down this time is that Turkey’s economy is mainly depends on import. And with the COVID-19 pandemic, its economic status has fallen, making it more difficult to settle trades with other countries.
Unlike Lira and other fiat currencies that have suffered a loss due to the global pandemic, Bitcoin’s price has seen new All Time Highs and is now more valued than Bank of America and New Zealand Dollar.
Although some authorities in Turkey have refused to accept the report that residents are choosing cryptocurrencies instead of the Lira, the result of the survey conducted by BtcTurk with the Istanbul University Statistics Appliances and Research Center confirms it. It revealed that there is a 58.5% increase in the number of satisfied Bitcoin users while 23% users think BTC can never fail them. The result also showed that beginning from February 2019, the number of Bitcoin users has increased by 100%.