The Turkish Lira Freefall And Bitcoin

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2021 was a rough year for the people of Turkey, as the country experienced rapid devaluation of its currency, the lira. Things haven’t improved in 2022 as the lira has suffered since Russia invaded Ukraine as sanctions and export bans have resulted in soaring commodity prices. According to official government reports, Turks are now suffering from 54.4% year-over-year (YoY) inflation, the highest in 20 years.

Annual Turkey Inflation Rate

inflation turkey rate

The central bank estimates that inflation will only be 23.2% YoY by year-end, but that estimation was made assuming the price of crude oil would be around $80 per barrel. The outbreak of war has caused the price of oil to spike well above $100 at the time of writing. Soaring commodity prices from the war likely mean the central bank is underestimating year-end inflation. To put things into perspective, Russia and Ukraine supplied 80% of Turkey’s $4 billion grain imports last year. If the price of that one single commodity increases drastically, that alone could cause Turkey’s inflation rate to rise.



Source link Bitcoin Magazine

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