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Turkish Lira Continues to Slide As Erdogan Urges Patriotic Turks to Convert Foreign Assets into Lira
In statements given to reporters today in Istanbul, Turkish President Recep Tayyip Erdogan has urged citizens to continue purchasing Turkish lira with their foreign assets to prop up the country’s sagging currency.
Erdogan praised cooperating Turks for their efforts, however, the president also urged all Turkish citizens to make further investments, “I believe my people should give more weight to this campaign,” he said.
Erdogan’s efforts may have temporarily halted the lira’s savage devaluation against the greenback this week, but a quick look at the USD/TRY chart shows that the lira’s troubles are far from over.
While the lira gained some ground against the dollar during the middle of the week, hitting a low of 3.337, the USD/TRY currency pair has resumed its uptrend over the past two days. On Thursday and Friday, the Turkish lira has lost about 4.9% against the greenback. At press time, the USD/TRY rate is hovering at 3.5 - only 7 cents below the all-time high of 3.586 - which was printed last Friday.
The lira’s demise was greatly exacerbated in the aftermath of the election of Donald Trump to POTUS. Since November 9, the lira has dropped 11% against the U.S. dollar!
The Erdogan administration, in addition to urging Turks to invest in the nation’s currency, has plans to boost local currency trading with some of Turkey’s largest trading partners - Russia and Iran - to ease FX market volatility, “I think we can remove the risk of currency volatility from our markets by taking these kinds of steps with countries with whom we have large foreign trade volume,” explained Erdogan, in statements to reporters on Friday.
It's unclear at this point if Erdogan's appeal to patriotism and various currency trade deals will slow down the lira's devaluation against other major currencies. However, there is already some evidence emerging that Turks are turning to alternative stores of value like Bitcoin to protect purchasing power. Charts from Coin.dance, which keeps track of turnover figures on P2P digital currency marketplace LocalBitcoins in various countries, show a sizable and consistent increase in Bitcoin trades being done in Turkey.
In the past three weeks, Bitcoin turnover in Turkey has increased considerably, with the biggest weekly volume taking place for the week ending on November 19, which showes TRY349,346 (141 BTC) worth of trades taking place in the country.