The Turkish Lira is not far off from requiring 8 TRY for one dollar with the currency falling by some 35% against a weakening dollar which itself is losing ground to CNY.
The Lira opened the year at 5.8 TRY per dollar, but following a 2020 in which Turkey has effectively declared they are a regional power, TRY has now dropped to 7.8 per dollar.
If they were China, this would be good for them but as Turkey imports $5 billion more than it sells every month, everything is becoming more expensive in the country with inflation at close to 12%.
There’s numerous bitcoin exchanges in Turkey which in combination handle about $100 million a day in trading volumes for this $700 billion GDP regional power.
Turks are also generally wealthy with things like bitcoin a potential useful tool to escape some of the very high inflation that continues to persist.
However, which way inflation goes, and thus Turk’s appetite for bitcoin, may well depend on how this effective declaration of a regional power develops.
In Libya they finally sat to talk. In Greece, they have also sat to talk. In Armenia and/or Azerbaijan, it is currently the guns talking.
Thankfully the fighting there has been very limited, but it’s a tense situation in a complex board that involves different interests on the part of America and Russia, but the same interest on the part of Europe and Turkey.
Russia certainly doesn’t want any competitor to their gas markets for Europe. America probably thinks it’s better they stay out of it for the optics if nothing else, but also they export oil now so they too might not want another competitor.
Europe is desperate for diversification and they have found it. Azerbaijani media reports 97.9% of the Trans Adriatic Pipeline has been completed, stating:
“TAP is moving closer to completing the project construction phase. In preparation for the start of commercial operation and as part of the testing and commissioning phase, the TAP pipeline has been filled with natural gas from the Greek-Turkish border up to the compressor station in Fier, Albania.”
From Albania it goes to Italy and then all of Europe. What’s more, Azerbaijan – which itself is very rich in oil and gas to the point they are called the land of fire – can connect to all the stanis through a pipeline and/or by sea, securing Europe’s energy needs for decades to come.
Making this region therefore pretty much vital for Europe. Which is why it is very unlikely anything serious would develop there because if it does an emergency European council may well think it best to send European troops and within hours to enforce peace.
What is happening instead is the need to secure the routes from Azerbaijan to Europe which go near the Nagorno-Karabakh region which is inhabited by Armenians but technically is Azerbaijan’s.
The involvement of Europe’s direct interests in all this makes an already difficult job for Putin, an even more difficult one as they probably can’t play without risking much as it would be near their borders.
Turkey on the other hand knows very well it or Azerbaijan can’t do anything stupid as no one wants any casualties whatever. What Turkey wants is yet another table, and preferably a German one.
It’s not clear however just how effective Germany is at these tables. A lot is resting on their shoulders and much of it at once, but grandma is the longest running democratically elected ruler in our lifetime.
So once they find a table and agree, then there can be more infrastructure from Baku to Europe, with a clear re-alignment here on-going that if navigated successfully, could restore general peace and even prosperity both in Europe and in its neighborhood.