On Concerns about Turkey s Financial Health, Lira Dives to New Low, Cost of Insuring Turkish Sovereign Debt Nearly Doubles | Wolf Street

In recent months, Turks have been buying up gold their traditional safe haven asset of choice in even bigger quantities than usual. The average daily volume sold at Istanbul s Grand Bazaar, one of the world s oldest still-operating markets, surged tenfold between the start of the lockdown, in March, and the end of the lockdown, in June, according to traders cited by the Wall Street Journal. Turkey s domestic gold production was not nearly enough to meet demand, so $15 billion of gold had to be imported from January to August, up 153% from a year earlier.

They can hardly be blamed for wanting to buy gold, the best-performing currency against the lira over the past ten years, given how quickly the currency in their pockets and in their bank accounts has been depreciating. Ten years ago, it took one and a half lira to buy a dollar. Today, it takes seven and a half. In one decade, the currency has lost 82% of its value against both the dollar and the euro, and 90% of its value against gold.

On Thursday, the lira fell to a fresh low of 7.55 against the dollar, of 8.91 against the euro, having shed 21% of its value against the greenback so far this year and 26% against the euro.

via wolfstreet.com