Foreign exchange regime, the real exchange rate and current account sustainability: The case of Turkey
AbstractDuring the last two and half decades Turkey has suffered from three foreign exchange crisis resulting in considerable loss of income. The paper argues that the country in order to avoid the foreign exchange crisis has to stay away from having too big current account deficits. Noting that under perfect capital mobility there will always be the unavoidable risk of speculative attacks on the currency unless the country resolves its fiscal problems, attains price stability, and achieves a sound banking sector, the paper stresses importance of current account sustainability and highlights shortcomings of current policies pursued by Turkey. --
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Bibliographic InfoPaper provided by ZEI - Center for European Integration Studies, University of Bonn in its series ZEI Working Papers with number B 17-2004.
Date of creation: 2004
Date of revision:
Current account sustainability; Turkey;
Other versions of this item:
- Subidey Togan & Hasan Ersel, 2004. "Foreign Exchange Regime, the Real Exchange Rate and Current Account Sustainability: The Case of Turkey," Working Papers 0422, Economic Research Forum, revised Oct 2004.
- F31 - International Economics - - International Finance - - - Foreign Exchange
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
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- Levent Korap, 2006. "An Analysis of Central Bank Interventions on Forex Market For The Post-Crisis Period," Working Papers 2006/4, Turkish Economic Association.
- Kasman, Adnan & Ayhan, Duygu, 2008. "Foreign exchange reserves and exchange rates in Turkey: Structural breaks, unit roots and cointegration," Economic Modelling, Elsevier, vol. 25(1), pages 83-92, January.
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