The effect of the amount and distribution of CBRT international reserves on exchange rates

Following the end of the Bretton Woods system, in which exchange rates and, therefore, the dollar's value was fixed to a certain amount of gold, the relationship between currencies and exchange rates became relatively more volatile and dynamic. Countries have chosen their exchange rate regimes and have followed policies that sometimes add value and devalue their currencies. Central banks are responsible for determining and implementing these policies. For Turkey, the CBRT has pursued policies to protect the value of the country's currency with different exchange rate regimes in different periods from the past to the present. It is necessary to find adequate resources to create a policy and ensure its effectiveness of the policies. Foreign exchange and gold reserves are two important assets that central banks use to guide monetary policy. In this direction, this study aims to determine the effect of foreign exchange and gold reserves on the exchange rate and put forward monetary policy recommendations. In the study, it was concluded that the total reserves did not affect the exchange rate, but the foreign exchange and gold reserves had a significant effect on the exchange rate. Keywords: Gold, Exchange rate, CBRT, Reserve