IDEAS home Printed from https://ideas.repec.org/a/bdd/journl/v14y2020i1p99-117.html
   My bibliography  Save this article

The Effect of Selected Macroeconomic Indicators on Foreign Exchange Rate: An Application on Turkey’s Economy

Author

Listed:
  • Kemal AKA

Abstract

The exchange rate plays a vital role in the country’s free trade economy and affects macroeconomic and financial variables such as interest rate, inflation rate, current account balance, foreign trade balance and unemployment rate. Instability and sudden increases in the exchange rate lead to the negative course of economic activities, leading to economic instability. For this reason, the exchange rate in recent years is one of the most talked about topics on for Turkey’s economy. It is important to examine the indicators that are effective for stabilizing the exchange rate and the causality relationship between these indicators.In this study, using quarterly data covering the period from 1988Q1-2019Q2 in Turkey’s economy, interaction between the exchange rate and selected macroeconomic indicators were analyzed using Granger causality test. As a result of the study, one-way from exchange rate to current account balance, terms of trade and foreign trade balance; a bilateral causality relationship between the exchange rate and oil prices was found.

Suggested Citation

  • Kemal AKA, 2020. "The Effect of Selected Macroeconomic Indicators on Foreign Exchange Rate: An Application on Turkey’s Economy," Journal of BRSA Banking and Financial Markets, Banking Regulation and Supervision Agency, vol. 14(1), pages 99-117.
    • Handle: RePEc:bdd:journl:v:14:y:2020:i:1:p:99-117
    as

    Download full text from publisher

    File URL: http://www.bddk.org.tr/Content/docs/bddkDergiEn/dergi_0027_06.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Exchange rate; Macroeconomic indicators; Causality test.;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bdd:journl:v:14:y:2020:i:1:p:99-117. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sumeyye Azize CENGIZ (email available below). General contact details of provider: https://edirc.repec.org/data/bddgvtr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.