The effects of exchange rate risk on economic performance: the Turkish experience

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Berument H., Dinçer N. N.

APPLIED ECONOMICS, vol.36, no.21, pp.2429-2441, 2004 (SSCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 36 Issue: 21
  • Publication Date: 2004
  • Doi Number: 10.1080/0003684042000287637
  • Journal Name: APPLIED ECONOMICS
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus
  • Page Numbers: pp.2429-2441
  • TED University Affiliated: No

Abstract

This study examines the effects of real exchange rate risk on the economic performance for an emerging, small open economy: Turkey. When the ratios of the total foreign exchange liabilities of the Central Bank of the Republic of Turkey (CBRT) to: (1) total reserves; (2) the CBRT's reserves; and (3) the CBRT's total Turkish lira liabilities are taken proxy of exchange rate risk, the empirical evidence suggests that the increase in exchange rate risk causes a depreciation in the real exchange rate, an increase in prices and a decrease in output.