The effects of the exchange rate systems to the foreign trade in Turkey

The exchange rate system is an important indication showing the reel value of a country?s currency, moreover it affect the economy by means of inflation, devaluation, interest and foreign trade. In this working, the effects of the exchange rate systems to the foreign trade have been studied. During the historical development process in Turkey, different exchange rate systems have been performed, in some periods the exchange rate adjustments have been used for balancing the foreign trade in accordance with the adopted exchange rate systems. A devaluation made for the purpose of balancing the foreign trade, would cause to an increase in exports in short-term, however due to the increase in imports would continue, the foreign trade gap would increase again. This fact indicates that only exchange rate policies by oneself are not enough for balancing foreign trade.In this working, in order to find out clearly if the exchange rate policies could be used for balancing the foreign trade, or not; the correlation between reel effective exchange rate and the components of foreign trade, will be analyzed according the Causality Test of Engle Granger, basing on the monthly datas belonging to the terms 1980: 01 ? 2009: 05. According the results of the Causality Test of Engle Granger; it could be stated that the effect of export and import on the reel effective exchange rate, is more strong than the effect of the reel effective exchange rate on export and import. The results of Econometric analysis also prove the fact that the exchange rate policies could not be used effectively for balancing the foreign trade. It appear that several local and foreign studies? conclusions are in the same sense as conclusions of hereby study.