Digital

Turkish Lira Hits Fresh Low, Bitcoin Surges Amid Central Bank Rate Decision

Picture Source: BeInCrypto

The Turkish Lira has reached a new low against the U.S. dollar, prompting concerns about the country’s economic stability. As the Turkish central bank gears up for a rate decision this week to tackle soaring inflation, Bitcoin has seen a surge in its value against the local currency. This article explores the recent developments in Turkey’s currency market and the implications for Bitcoin.

Turkish Lira’s Record Low:

On July 18, the Turkish Lira hit a record low of 27.3 against the U.S. dollar, marking a sharp decline in value that has persisted for the past two months. Data from TradingView indicates that the currency is currently trading at 26.92. The ongoing decline has raised alarms among investors and economists.

Bitcoin’s Rally in Turkey:

The weakening Turkish Lira has led to a surge in the value of Bitcoin when compared to the local currency. Notably, Michael Saylor, the CEO of MicroStrategy and a prominent Bitcoin proponent, shared the chart highlighting this phenomenon. Turkish traders have been closely observing the BTC/TRY pair, noticing the new price peak and questioning whether Bitcoin can serve as a hedge against inflation.

Central Bank’s Rate Decision and Inflation Concerns:

In an effort to curb inflation, which has already reached an alarming 38.2%, Turkey’s central bank is expected to raise its policy rate by 500 basis points to 20% in the upcoming rate decision. This move follows the Lira’s steady decline and reflects the central bank’s commitment to stabilizing the economy. It is worth noting that Turkey experienced a two-decade high of 85.5% inflation in October 2022.

Market Reaction and Bitcoin Price Outlook:

The prospect of the central bank’s interest rate hike falling below market expectations has triggered further depreciation of the Turkish Lira. Consequently, Bitcoin prices on local exchanges have soared to new highs. On Turkey’s largest exchange, Paribu, BTC prices reached 820,600 Lira at the time of writing, equivalent to around $30,470. This represents a 1.3% premium over global BTC spot prices.

On global markets, Bitcoin is currently trading at $30,085, having dipped to $29,720 during late trading on July 18. Despite its recent surge, Bitcoin has experienced a 5% decline since its peak induced by Ripple last week. The cryptocurrency has been trading within a tight range over the past four weeks, with trading volumes drying up. Failure to break resistance at $31,000 on multiple occasions may result in a potential revisit to lower levels in the short term.

Read More: Celo’s Proposal to Transition to Ethereum Layer 2 Raises Questions within the Community

Conclusion:

The Turkish Lira’s fall to a fresh low against the U.S. dollar has raised concerns about the country’s economic stability and led to an increased interest in Bitcoin as a potential hedge against inflation. As the central bank prepares to raise interest rates, its decision will have significant implications for both the Lira and Bitcoin. Investors and traders will be closely monitoring these developments, which may shape the future of Turkey’s financial landscape.