Inflation Provokes Panic across Turkey

Endy Callahan

What has been recently happening worries many governments. Politicians are striving to save people and help them survive after the coronavirus. COVID-19 hasn’t gone unnoticed and it brought too many problems to absolutely all countries in the world. In some instances, there is not too much that people can do if they do not receive financial aid or any other sort of assistance from the authorities.

Nowadays, statistics show that the number of unemployed people has grown. Many small businesses haven’t managed to survive and now they are closed. The pandemic has ruined the lives of thousands of people and we still feel that the issues that the disease has brought haven’t yet been fully resolved in many regions and areas.

One such country is Turkey where the population is now panicking since they see that the economic situation across the country is getting only worse. Leading mass media outlets state that the government is expecting to see massive inflation in the nearest future. Of course, what is occurring across the territory makes all Turkish residents lose faith in their local fiat money. According to recent data, the lira seems to be falling twenty percent this year.

Horrifying inflation is significantly affecting the population’s confidence in the country’s currency.As several news agencies announce, local people are ready to dump lira and start converting their money to U.S. dollars. Part of those people are willing to purchase gold. No doubt, the government is trying to calm people down and ensure stability.

There are market interventions, too. Even though politicians present reassuring stories about financial well-being, the nation sees everything in a different light. Right now, inflation is at almost twelve percent and has overtaken the level of interest provided for savings at various banks. Many people believe that the safest asset is gold.

Choosing Gold over Liras

Some prominent market analysts admit that the best investment at the moment would be gold. That’s the reason why Turkish people convert their fiat money to purchase the precious metal. They may withdraw their liras and purchase the metal with it as well. On the other hand, most residents are not prepared to go to the bank due to the disease.

Some locals think they will soon see panic-selling of the fiat money. This depends on the government’s decision to boost the nation’s confidence in the native currency. And the lira, as all people know, has fallen by approximately twenty percent this year. Another problem that worries the nation is that inflation is going to be massive and, which is not less important, it will last for quite some time before some positive changes will start occurring in the Turkish market.

The fact is that the country’s economy is greatly dependent on imports and the pandemic has made inflation more serious. It may also raise a huge balance of payment issues and this, in turn, will weaken the native currency. On the other hand, even though the fiat money keeps on losing its value because of terrifying inflation, cryptocurrencies and the crypto market cap has been growing.

It is not yet clear whether crypto adoption will be widely spread in the nearest future, but some of the major local exchanges carried out research with a few prominent organizations last month. Their mission was to find how the pandemic affected industries. According to the reports, people’s trust in crypto has increased by over twenty percent. More than that, their satisfaction rose by almost fifty-nine percent. In the past years, usage across the country has doubled.