As the value of the Turkish Lira falls and new forex requirements surface, citizens swap it for Gold, increasing the country’s Gold imports by 1700%. In September 2022, Turkey imported 39,000 Kgs of gold which is a 16 times jump from last year. This sudden increase is also due to more demand for Gold in international business and transactions.
Why is the Turkish Lira being swapped for Gold?
The 1700% jump in Gold imports in Turkey was reported by Borsa Istanbul’s Precious Metals and Diamond Markets. While the imports were around 39,000 kgs in September, the total amount in 2022 till now has risen to 140,126 kgs. The deputy manager at Info Investment explained why there is a sudden demand for Gold in the country. This has to do with the changing requirements of buying Forex, which says people with large FX demand have to use Gold instead of Turkish Lira for transactions.
Lira’s falling value
Lira’s falling value is another reason Gold is preferred over the fiat currency. We are in a bad economic state all around the world, with high inflation and a recession reeking around the corner. And most currencies are losing their value drastically. The same is the case with Lira. In Jan 2020, 1 USD= 5.5 Lira, but at present, the exchange rate has jumped by 300% to 1 USD= 18.58 Lira. The currency is depreciating at such a rapid pace that, for investors, it doesn’t make sense to hold it.
It’s not even just Gold, as around 68,000 kgs of Silver was also imported in September 2022, which shows the high demand for precious metals. Crypto use is also seeing a rise in Turkey as Bitcoin and stablecoins become more popular.
What can we understand from this?
Fiat currencies from all across the world are getting depreciated. The difference is just in the speed. Inflation is also only going to go up from here, and recession will soon be on our doorstep. So, it’s time to invest in assets that have stood the test of time and also have major potential. Gold, Silver, and Bitcoin are some of these investments that one should look at right now.
What are your thoughts as Citizens swap the Turkish Lira for Gold as the value of the currency falls? And do you think Lira will recover? Let us know in the comment below. And, if you found our content informative, share it with your family and friends.
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