Evaluation of the effects of FOREX market transactions on the financial market: Implementation in Turkey

The aim of this research is to examine the effect of FOREX market transactions on the financial market in Turkey. The FOREX market is a global market with an intense trading volume in the world, without participation restrictions. Increasing interest in the FOREX market also increases the volume of transactions. For this reason, it is important to examine the effect of the FOREX market on financial markets. Within the scope of the research, different data were used to define the financial markets and FOREX market. All of the data has been taken from the CBRT EVDS (Electronic Data Distribution System). Data were provided on a 3-month basis, covering the period 2010Q1 to 2022 Q1. The data have been deflated with the 2010- based CPI in order to be free from inflation. The logarithmic forms of the FX Deposit, Banks Total Liquidity Per Day, FOREX trading volume variables were used for the data. In the research, FOREX transaction volume affects the CPI variable in the 2nd delay, the total amount of foreign currency deposit accounts in Turkey at the 1,2,3,4,8th delay, and the total liquidity amount per day in the banks at the 2,3rd delay. However, it has been determined that the FOREX trading volume does not affect the gold ONS price and the VIOP 30 price. In the research, it was determined that the FOREX transaction volume affects the total liquidity amount per day of the banks, while the total liquidity amount per day of the banks is not effective on the FOREX transaction volume. However, while the ONS gold price has an effect on the FOREX trading volume, the FOREX trading volume has no effect on the ONS price. Key Words: Financial Markets, FOREX Market, Turkey