The Turkish economy has been declining for decades. Can crypto save the suffering citizens?
Can cryptocurrency be the cure for high inflation and the valueless Turkish lira?
The war between Ukraine and Russia will most likely mark 2022 as the year of inflation.
After hovering around 5% for years, inflation has surged to up to 9% in both the United States and the European Union. The sudden and unexpected changes to energy and food supplies have been shown to be the main reasons for this inflation, combined with the Federal Reserve Board’s quantitative easing model.
No matter how bad it sounds for the countries used to 2% inflation now having 9% at the moment, it is still not as bad as what has been happening to the Turkish economy.
Inflation there is currently officially reported as 80%, but this is not even close to the real level, which is 140% according to ‘unofficial measurements’, mostly by opposition economists whom the government and its followers have tried to silence.
While these distressing numbers have hit Turkish citizens hard, they are also facing another issue adversely affecting prices and the quality of life of Turkish citizens.
Many Russians and Ukrainians have settled in the country since the outbreak of war, and these foreigners mostly have money and are spending US dollars. This has affected rents as well as food and entertainment prices, and has left Turkish citizens destitute. Their money already had little value due to inflation, yet prices in the country increased even more because of the migration of rich people fleeing the war.
The rising value of the US dollar against the Turkish lira has turned Turkish citizens’ eyes toward cryptocurrencies.
Although the Turkish government as well as the religious institutions in the country have announced they are against cryptocurrencies, interest in crypto investments is increasing rapidly.
Can cryptocurrency be the cure for high inflation and the valueless Turkish lira?
According to figures from August 2022, the official consumer price index was 80.2% in Turkey, even higher than in the previous month of July, already considered very high.
Inflation reached its highest-ever level since 1998 (the former record) by passing 80%. This also marks the highest level in the 20-year rule of Recep Tayyip Erdoğan.
The Central Bank of Turkey is refusing to increase Turkish lira interest rates due to a decision by the government, leading US dollar prices to pump up instead of falling. The Turkish government has claimed since early 2022 that US dollar prices would go down as it is keeping interest rates constantly low.
An announcement from the government claimed that inflation would fall in the upcoming months and will never return to the country.
That said, the Turkish government is very much known for its broken promises and unrealistic announcements.
Sources: cryptonews.com
analyst opinion
Eda Tutkun
The war between Ukraine and Russia will most likely mark 2022 as the year of inflation.
After hovering around 5% for years, inflation has surged to up to 9% in both the United States and the European Union. The sudden and unexpected changes to energy and food supplies have been shown to be the main reasons for this inflation, combined with the Federal Reserve Board’s quantitative easing model.
No matter how bad it sounds for the countries used to 2% inflation now having 9% at the moment, it is still not as bad as what has been happening to the Turkish economy.
Inflation there is currently officially reported as 80%, but this is not even close to the real level, which is 140% according to ‘unofficial measurements’, mostly by opposition economists whom the government and its followers have tried to silence.
While these distressing numbers have hit Turkish citizens hard, they are also facing another issue adversely affecting prices and the quality of life of Turkish citizens.
Many Russians and Ukrainians have settled in the country since the outbreak of war, and these foreigners mostly have money and are spending US dollars. This has affected rents as well as food and entertainment prices, and has left Turkish citizens destitute. Their money already had little value due to inflation, yet prices in the country increased even more because of the migration of rich people fleeing the war.
The rising value of the US dollar against the Turkish lira has turned Turkish citizens’ eyes toward cryptocurrencies.
Although the Turkish government as well as the religious institutions in the country have announced they are against cryptocurrencies, interest in crypto investments is increasing rapidly.
Can cryptocurrency be the cure for high inflation and the valueless Turkish lira?
According to figures from August 2022, the official consumer price index was 80.2% in Turkey, even higher than in the previous month of July, already considered very high.
Inflation reached its highest-ever level since 1998 (the former record) by passing 80%. This also marks the highest level in the 20-year rule of Recep Tayyip Erdoğan.
The Central Bank of Turkey is refusing to increase Turkish lira interest rates due to a decision by the government, leading US dollar prices to pump up instead of falling. The Turkish government has claimed since early 2022 that US dollar prices would go down as it is keeping interest rates constantly low.
An announcement from the government claimed that inflation would fall in the upcoming months and will never return to the country.
That said, the Turkish government is very much known for its broken promises and unrealistic announcements.
Sources: cryptonews.com
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