DOLLARIZATION’S EFFECTS IN TURKEY ECONOMY

Year 2021, , 72 - 106, 13.02.2022

Muhammed Ali Celaleddin Önen , Yurdagül Meral

https://doi.org/10.55065/intraders.1058509

Abstract

In order to preserve the value of assets in high-inflation countries, investors
turn to currencies of economically stable and secure countries. After the
liberalization steps taken into action in the 1980s in Turkey, the volume of foreign
currencies entering into its economy has also increased. However, high inflation, low
domestic investments, increasing import volume and weak financial base left the
Turkish economy with the reality of dollarization. In this study, the definition of
dollarization and currency substitution is explained in details. The aim of this study is
to describe the difficulties Turkey faced with dollarization from the very beginning
up to a certain period in chronological order. This study involves that by means of
considering of time-series comparative analysis data method and to investigate the
facts constituting the reasons of dollarization were associated to the by causality
method. The expected result in this study is with high inflation and uncertainties both
in political environment and economy can lead high dollarization in the economy.

Keywords

Dollarization, Currency Substitution, Dollarization and Turkey

DOLARİZASYONUN TÜRKİYE EKONOMİSİNE ETKİLERİ

Abstract

Yüksek enflasyonlu ülkelerde varlıkların değerini korumak için yatırımcılar
ekonomik olarak istikrarlı ve güvenli ülkelerin para birimlerine yönelmektedir. Türkiye'de
1980'li yıllarda uygulamaya konulan liberalleşme adımlarının ardından ekonomisine giren
döviz hacmi de artmıştır. Ancak yüksek enflasyon, düşük yurtiçi yatırımlar, artan ithalat
hacmi ve zayıf mali taban, Türkiye ekonomisini dolarizasyon gerçeğiyle baş başa bıraktı.
Bu çalışmada dolarizasyon ve para ikamesinin tanımı detaylı olarak anlatılmıştır. Bu
çalışmanın amacı, başlangıçtan belli bir döneme kadar Türkiye'nin dolarizasyonla
karşılaştığı zorlukları kronolojik bir sıra içinde anlatmaktır. Bu çalışma, zaman serileri
karşılaştırmalı analiz veri yöntemi dikkate alınarak dolarizasyonun nedenlerini oluşturan
olguların nedensellik yöntemiyle ilişkilendirilmesini içermektedir. Bu çalışmada beklenen
sonuç, yüksek enflasyon ve hem politik ortamdaki hem de ekonomideki belirsizliklerin
ekonomide yüksek dolarizasyona yol açabileceğidir.

Keywords

Dolarizasyon, Para İkamesi, Dolarizasyon ve Türkiye

References

• Reference1 Agenor, Pierre Richard, and Mohsin Khan. (1992). “Foreign Currency Deposits for Money in Developing Countries,” IMF Working Paper, no. 1.
• Reference2 Altınkemer, M. (1996), “Para İkamesi, Hiperenflasyon ve İstikrar Programları”, TCMB Tartışma Tebliği, No: 9629, Kasım 1996, 287–297, http://www.tcmb.gov.tr/research/discus/9629tur.pdf , 20.05.2021.
• Reference3 Aşıkoğlu, Y. (1995), “Strategic Issues in Exchange Rate Liberalization of The Turkish Experience”, Finance, Exchange Rates and Financial Liberalization, Collected Works of Yaman Aşıkoğlu, Capital Markets Board Pub., İstanbul.
• Reference4 Bahmani-Oskooee, M. and Domaç, İ. (2003). On the Link between Dollarisation and Inflation: Evidence from Turkey. Palgrave, 306-328.
• Reference5 Banks Association of Turkey. (2020). Geographical Regions-Provinces Domestic Residents' Foreign Currency Deposits. Istanbul: Banks Association of Turkey.
• Reference6 Calvo, G. and Gramont, C. V. (1992). “Currency Substitution in Developing Countries”, IMF Working Paper 92/40: 3.
• Reference7 Canto, Victor A., and Gerald Nickelsburg. (1987). Currency Substitution: Theory and Evidence from Latin America, Norwell, MA: Kluwer Academic Publishers.
• Reference8 Central Bank of The Republic of The Turkey, CBRT EVDS Data Central (2022), Exchange Rates-Banknotes(Daily) <https://evds2.tcmb.gov.tr/index.php?/evds/DataGroupLink/1/bie_dkefkytl/en>, 12.01.2022.
• Reference9 Central Bank of The Republic of Turkey. CBRT EVDS Data Central (2022). 1 Ons Gold London Selling Price (USD/Ons) < https://evds2.tcmb.gov.tr/index.php?/evds/DataGroupLink/9/bie_mkaltytl/en >, 12.01.2022. 30
• Reference10 Civcir, İ. (2003), “Dollarization and Its Long-run Determinants in Turkey”, Middle East Economics Series, Vol. 6, <http://www.econturk.org/Turkisheconomy/Dollarization_in_Turkey_MEP.pdf>, 20.05.2021.
• Reference11 Cutter, W. B., Spero, J., & Tyson, L. D. A. (2000). New world, new deal: a democratic approach to globalization. Foreign Affairs, 80-98.
• Reference12 Günal, M. (2001), “Kasım 2000 Krizine Teorik Yaklaşım: Para Arzının İçselliği ve Minsky’nin Finansal İstikrarsızlık Hipotezi”, İktisat, İşletme ve Finans Dergisi, (180), 68– 83.
• Reference13 Hekim, D. (2008), “Para İkamesi Histerisi: Türkiye Örneği”, Osmangazi University İİBF Journal, 3(1) , 27–43.
• Reference14 International Monetary Fund . (2021). International Monetary Fund IMF DataMapper: <https://www.imf.org/external/datamapper/PCPIPCH@WEO/PER/ARG/VEN?year=20>, 15.01.2022.
• Reference15 International Monetary Fund . (2021). International Monetary Fund IMF DataMapper: <https://www.imf.org/external/datamapper/PCPIPCH@WEO/TUN/NGA/KEN?year=202 ,15.01.2022.
• Reference16 International Monetary Fund . (2021). International Monetary Fund IMF DataMapper: <https://www.imf.org/external/datamapper/PCPIPCH@WEO/MYS/KHM/PAK?year=2022 >,15.01.2022.
• Reference17 International Monetary Fund . (2021). International Monetary Fund IMF DataMapper: <https://www.imf.org/external/datamapper/PCPIPCH@WEO/RUS/ROU/EST?year=2022> ,15.01.2022.
• Reference18 Iqbal, J. (2017). Does Gold Hedge Stock Market, Inflation and Exchange Rate Risks? An Econometric Investigation. International Review of Economics & Finance, 48, 1–17. 31
• Reference19 Karacal, M. (2005). Does Dollarization Really Matter ? An Empirical Investigation of The Turkish Economy. Wisconsin : UMI Microform .
• Reference20 Luca, A. and Petrova, I. (2003). What Drives Credit Dollarization in Transition Economies. Is It Firms or Banks Fault, October 15: 4.
• Reference21 Mckinnon, R. I. (1985). Two Concepts of International Currency Substitutions. The Economics of the Caribbean Basin, 104.
• Reference22 Melvin, Michael. (1988). “The Dollarization of Latin America as a Market-Enforced Monetary Reform: Evidence and Implications,” Economic Development and Cultural Change, vol. 36, pp. 543-557.
• Reference23 Metin-Özcan, K and V. Us (2009), “What Derives Dollarization in Turkey?”, Journal of Economic Cooperation and Development, 30 (4), 29–50.
• Reference24 Ozsoz, E., Rengifo, E. W. and Kutan, A. M. (2015). Foreign Currency Lending and Banking System Stability: New Evidence From Turkey. Central Bank Review, 15, 1–29.
• Reference25 Pekkaya, S. ve S. Kesici (2000), “Türkiye Örneğinde Kısa Vadeli Sermaye Hareketleri Makroekonomik Dengeler Üzerinde Reel Kesim Mali Kesim Ayrimiyla Etkileri”, Journal of İktisat İşletme ve Finans, (167), 58–83.
• Reference26 Ramirez-Rojas, Luis. (1985). “Currency Substitution in Argentina, Mexico, and Uruguay,” IMF Staff Papers, vol. 32, no. 4, pp.629-67.
• Reference27 Reinhart, C. M., Rogoff, K. S., & Savastano, M. A. (2003). Addicted to dollars (No. w10015). National Bureau of Economic Research.
• Reference28 Rengifo, E. W., Ozsoz, E., & Akinkunmi, M. A. (2013). Bank regulation in dollarized economies: The case of Turkey. International Journal of Financial Studies, 1(4), 137-153.
• Reference29 Rodrik, D. (2000). Yeni Küresel Ekonomi ve Gelişmekte Olan Ülkeler. Translated by: S. Gül, Sabah Kitapları, İstanbul, 13. 32
• Reference30 Savastano, Miguel A. (1996) “Dollarization in Latin America: Recent Evidence and Policy Issues,” in Mizen, Paul, and Eric J. Pentecost, (eds.), The Macroeconomics of International Currencies, Cheltenham, UK: Edward Elgar Publishing Ltd., pp. 225-255.
• Reference31 Selçuk, Faruk. (1994). “Currency Substitution in Turkey,” Applied Economics, vol. 26, no.5, pp. 509-518.
• Reference32 Serdengeçti, S. (2005), Dolarizasyon / Ters Dolarizasyon, <http://www.tcmb.gov.tr/yeni/duyuru/2005/sunumeskisehir.pdf>, 20.05.2021.
• Reference33 Sever, E. (2012). The Relationship between Dollarization Process and Exchange Rate Uncertainty in Turkey. Sosyoekonomi, 203-222.
• Reference34 Sui, M., Rengifo, E. W. and Court, E. (2021). Gold, Inflation and Exchange Rate in Dollarized Economies – A comparative Study of Turkey, Peru and the United States. International Review of Economics and Finance(71), 82-99.
• Reference35 The World Bank. (2021, December 16). The World Bank Group, from Data Bank World Development Indicators “Broad Money (current LCU)”: < https://databank.worldbank.org/reports.aspx?source=2&country=TUR# > , 11.01.2022.
• Reference36 The World Bank. (2020). The World Bank Group, from Data Bank World Development Indicators “Consumer Price Index” : < https://databank.worldbank.org/reports.aspx?source=2&country=TUR# >, 11.01.2022.
• Reference37 The World Bank. (2020). The World Bank Group, from Data Bank World Development Indicators “Industry (including construction), value added” : < https://databank.worldbank.org/reports.aspx?source=2&country=TUR# >, 11.01.2022.
• Reference38 Wang, K. M. and Lee, Y. M. (2016). Hedging Exchange Rate Risk In The Gold Market: A Panel Data Analysis. Journal of Multinational Financial Management, 35, 1–23.
• Reference39 Yılmaz, M. and Uysal, D. (2019). The Relationship Dollarization and Inflation in Turkey . Economics Business and Political Researches, 4(10), 286-306.