The impact of exchange rates on net domestic borrowing: Turkey case

Exchange rates have a great impact on the preferences of individuals such as investment and consumption. Households (consumers) and firms (producers) take into account the exchange rates as well as other factors in the economy when making consumption, production and investment decisions. If the producers meet the raw material used as production input from abroad, they will take into account the exchange rates when making production decisions, and consumers will be affected by both the cost changes and the opportunity cost changes between consumption and investment when making decisions about the products they will buy. In this context, exchange rates can significantly affect the decision-making mechanisms and other macroeconomic variables in the economy. In this study, the impact of foreign exchange rates on net domestic borrowing is discussed in Turkey axis.