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Should Turkiye Adapt USD as its Domestic Currency?

Author

Listed:
  • Cenap Ilter

    (California State University Domiguez Hills, 1000 E. Victoria Street, II 4304, Carson, CA, 90747, USA)

Abstract

Dollarization is visible in developing countries that are prone to high inflation and local currency devaluation against hard currencies. Market makers demand hard currencies as store of value and distance themselves from local currency. Over the years, worn out due to continuous devaluations and high inflation, countries convert their local currencies to hard currencies either through official conversion or adopting it by market makers and public in general. Dollarization has been underway for a long time in Turkiye. In its economic history there has been many devaluations and high inflations. Its currency is no longer a store of value. The paper explores two alternatives. One is establishing a currency board and the second being if the USD can be a replacement currency for TL. It concludes that replacing TL with USD will be the best solution for Turkiye`s continued economic downturns. Along with currency replacement, should come the government savings and borrowing from IMF as part of the suggested solution.

Suggested Citation

  • Cenap Ilter, 2024. "Should Turkiye Adapt USD as its Domestic Currency?," Acta Marisiensis. Series Oeconomica, "George Emil Palade" University of Medicine, Pharmacy, Sciences and Technology of Târgu-Mureș, România - Faculty of Economics and Law, vol. 1, pages 1-18, December.
    • Handle: RePEc:pmu:oecono:v:1:y:2024:p:1-18
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    Keywords

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    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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