Turkey residents flee to Bitcoin as a change in the leadership of the local central bank spurs fears of inflation.
Al Jazeera reported on March 20 that Turkey's President Recep Tayyip Erdogan issued a decree firing the central bank governor Naci Agbal.
Agbal had held this position for only four months, during which he earned the gratitude of local investors for raising interest rates and promising a more constructive monetary policy. His actions caused the price of the local fiat currency to soar from historical lows.
The Turkish lira has seen better times as the country's economy seems to be headed for a severe downturn. Turkey's inflation rate has been in the double-digits, reaching 15% in 2019, 16% in 2017 and 11% in 2016. More recently, the country's statistical authority announced that Turkey posted a 14.97% annual rise in consumer prices in 2020.
It should not come as a surprise that in this situation, Turkey's citizens are turning to Bitcoin in an attempt to escape the inflation that is eating their savings away. Just hours after the removal of Agbal from his office, the Turkish lira dropped by 14%. According to data available at Google Trends, local searches for "Bitcoin" have increased by 566% this year . Many market participants expect that the removal of the central bank's governor will be followed by the undoing of his policies.