Money as an Investment and Savings Tool in Inflationary Periods: An Analysis of the Turkish Lira

Abstract

After the Covid-19 epidemic, economies around the world showed a tendency to slow down and the central banks turned to expansionary monetary policy instruments in response to this slowdown threat, leading to an increase in inflationary effects around the world. The threat of inflation spreading around the world; It has revived the inflation fears of the people in Turkey, which has struggled with inflation for many years and partially succeeded after the 2000s. As a feature of inflationary periods, citizens tend to move away from production and national currency, with the concern that their purchasing power will decrease in the future, and move to more speculative fields such as gold, foreign exchange and real estate, which they believe will provide faster returns. Behaviours such as the volume increase in the foreign currency deposit accounts of the citizens in Turkey in recent years, the increasing borrowing in Turkish lira, and the tendency of people to carry out their long-term shopping in foreign currency assets, seem to reduce the functions of investment, transaction and savings tool, which are considered necessary for any exchange unit to be considered money. In this study, it is aimed to examine the performance of the Turkish lira in the period dominated by inflationary realities.