According to local media reports, following the results of presidential elections, there are more troubles brewing for the economy. Reportedly, following the re-election of conservative president Recep Tayyip Erdoğan, the local Turkish currency has again taken a dip.
On Tuesday, the Turkish Lira dropped to a new low soon after the results were announced. The Lira has weakened to around 20 to the U.S. dollar following a 20% slump. Notably, the Lira has already lost more than 90% of its value over the past decade.
As evident in the past months, the Turkish economy has been through a number of boom-and-bust cycles amid bouts of rampant inflation. The inflation rate in Turkey is currently around 44%, but it skyrocketed to 85% in October.
Anti-crypto Erdogan won by a slim majority of 52%, with pro-crypto opposition leader Kemal Kilicdaroglu securing 48%. Erdogan, who has been in power for the past two decades, is set for another five years governing the country. Commenting on the reelection of Erdoğan, Danske Bank chief analyst Minna Kuusisto said:
In the absence of a U-turn in his economic policies, the risk of an acute currency crisis looms.
Additionally, Reuters reported that years of economic turmoil have been blamed on his unorthodox economic policies, which the opposition had pledged to reverse. Soon after reclaiming the presidential position, Erdoğan displayed an aggressive tone. He took a shot at his political opponents and committed to continuing his unorthodox economic policies.
Notably, Erdogan has been vehemently against raising interest rates to suppress inflation. Experts say that the slump in currency value might drive people to store-of-value assets such as Bitcoin and gold.
At the peak of its inflation woes in 2022, data showed how people were embracing Bitcoin in Turkey. Volumes on the now-closed peer-to-peer platform LocalBitcoins surged in the first half of last year. Turkey outlawed crypto payments in 2021, but that has not deterred those seeking an economic life raft as the Lira sinks.
However, Turkish citizens have continued to store cryptocurrencies in the face of economic struggle. Reportedly the crypto ownership in Turkey has marked a splendid 27.1% increase from July-September 2021 to July-September 2022.
Notably, citizens in several countries troubled with inflation and currency devaluation have enthusiastically looked up to cryptocurrencies as a store of value and one such case is of Argentina. As Toadyq News reported, since the start of the year, the Peso has lost 24% against the Dollar hitting a record low with each passing week.
Interestingly, in such economic distress, the majority has been found to favorably look up to Javier Milei, a libertarian economist and pro-Bitcoin presidential candidate for his unconventional approach. According to the polls, about 59.2% of Argentinians seek “total change” of government which resonates well with Milei’s campaign focusing on doing away with conventional politicians.