Effects on foreign trade exchange rate: Application to Turkey

In this study, the definitions of the concept of exchange rate encountered in all areas of life, and its effects on import and export activities and foreign trade volume were investigated. In this context, Turkey's import and export data were obtained from the website of the Turkish Statistical Institute (TUIK) and the Central Bank of the Republic of Turkey (CBRT) within the framework of the sample created for the period from the first quarter of 2013 to the 10th month of 2022. In addition, import and export variables were used to analyze the effect of real exchange rate on foreign trade. Monthly time series analysis was used in the study. In this context, first of all, ADF and PP unit root tests were used. Cointegration analyzes were performed and the results were revealed. As a result of the empirical analysis, the fluctuations in the real effective exchange rate have an impact on foreign trade in the long run. The real exchange rate has both long-term and short-term effects on exports. However, it does not have a significant effect on imports. In this context, the exchange rate policies implemented by decision makers and policy makers in the light of a more realistic exchange rate understanding play an active role in combating the current account deficit and foreign trade deficit