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- Title
TÜRKİYE'DE DOLARİZASYONUN DİNAMİK MARKOV REJİM DEĞİŞİM MODELİ İLE ANALİZİ.
- Authors
ÇAKIR YILDIZ, Üyesi Nuran; ŞARKAYA İÇELLİOĞLU, Cansu; TUNA, Üyesi Elif
- Abstract
Dollarization is prefering to use more reliable foreign currencies because of the loss of confidence in the national currency. When there is a widespread expectation that the national currency will lose its internal and external value, the dollarization rate increases. The increase in volatility in exchange rates, chronic inflation, the decrease in the real return of the national currency and the worsening of indicators such as foreign debt, international reserves, budget deficit and current account deficit lead to a decrease in confidence in the national currency. The economy have high dollarization becomes fragile. Exchange rate risk arises and capital movements are adversely affected. International reserves are lost. The balance sheet structure of the private sector deteriorates and this situation is also reflected in the banking system. In addition to all these, high dollarization weakens the effectiveness of monetary policy. The issue of dollarization, which is very important from an economic point of view, has been analyzed through the Dynamic Markov Switching Model in our study, as it allows to include the differentiation inherent in the variable in the stagnation and expansion states of the economy. Current account balance and real effective exchange rate that are variables affecting asset dollarization were analyzed using monthly data between 2013-2021 in Turkey. According to the findings, as the real effective exchange rate decreases (the value of the national currency decreases), dollarization increases. The effect of the current account balance on dollarization differs according to periods to the regime periods.. While there was a negative relationship between the current account balance and dollarization in the pre-2018 period when the exchange rates were relatively low, a positive relationship was found between the current account balance and dollarization after 2018 when the exchange rates were high.
- Subjects
TURKEY; BALANCE of payments; CAPITAL movements; NATIONAL currencies; MONETARY policy; BUDGET deficits; FOREIGN exchange rates
- Publication
Financial Analysis / Mali Cozum Dergisi, 2022, Vol 32, Issue 172, p171
- ISSN
1303-5444
- Publication type
Article