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Bitcoin nudges ATH against Turkish lira after Erdogan’s recent rate cut

                                                            Bitcoin steigt gegenüber der Türkischen Lira in die Höhe – aber nicht aufgrund der gestiegenen Nachfrage.  Vielmehr führen niedrige Zinsen dazu, dass die Währung des Landes rapide sinkt und ihren Wert gegenüber Bitcoin, Dollar und anderen Währungen/Anlagen sinkt.

The Turkish lira is collapsing

As reported by Reuters, the lira fell another 5.6% against the dollar on Thursday. This was followed by a key interest rate cut by the national central bank by 100 basis points on the same day.

Since September the currency has fallen 47% against the dollar. Worth 8.29 lira in early September, the dollar’s lira value is now above 15.6.

President Tayyip Erdogan has pursued an unusual and risky policy of massive rate cuts in the face of rising prices across the country. Cumulative easing has risen to 500 points since September, with a forecast rate of 13% for early 2022. In response, the Turks sold their currency, further escalating their plunge.

Even if the USinflation Not nearly as high this year, they saw exceptionally high inflation this year. While Federal Reserve Chairman Jerome Powell plans to cut bond purchases in response, Erdogan has instead decided to raise the minimum wage by 50% by 2022. He continues to prioritize credit and exports to fuel the economic recovery.

Inflation is now dangerously high at 21%. Ipek Ozkardeskaya – Senior Analyst at Swissquote Bank – criticizes Erdogan’s approach.

“It is a brave step that will certainly cost Turkey a lot of money and headaches. The knee jerk reaction is a violent sell-off in the lira, ”she said.

Bitcoin’s solution

Bitcoin was created as a cure for the rampant inflation that nations like Turkey are experiencing among fiat currencies. His fixed supply of 21 million coins grants him immunity from monetary devaluation, which earned him the name “digital gold”.

Although the Cryptocurrency was more than 25% below its peak in US dollars, the cryptocurrency hit over 799,000 lira each. just one All time high opposite the Lira coin.

Trend data from Google this year has reflected an increasing interest in cryptocurrencies in Turkey.

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Source: Crypto News Deutsch

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