The Interrelationship Between Exchange Rates, Maritime Exports and Inflation: The Case of Türkiye

Abstract

International trade volumes fluctuate based on various economic factors unique to each country. A nation’s capacity to conduct imports and exports hinges on its use of international currencies and the relative value of its currency compared to those of other nations. These exchange rates are evaluated in nominal and real terms to determine the inter country currency values. Nominal exchange rates include inflation effects, whereas real exchange rates are adjusted to exclude such influences. The calculation of the real effective exchange rate (REER) involves averaging the unit prices of valuable goods from other countries. Increases or decreases in exchange rates affect a country’s import and export quantities. Moreover, fluctuations in domestic price levels also impact trade dynamics. While many studies have investigated the existence and direction of interactions among these variables, this study distinctively focuses on maritime transport exports within the export sector. This study contributes to research on the transportation sector by analysing maritime transport exports, a key transport mode, in the context of Turkey. It explores the interplay between maritime transport exports and economic variables such as the real effective exchange rate and inflation. Data were gathered monthly from 2005 to 2022, and after conducting unit root tests, Vector Autoregression (VAR) analysis and the Toda-Yamamoto causality test were applied to evaluate causality. The findings indicate a bidirectional causal link between the real effective exchange rate (REER) and maritime transportation exports and a unidirectional causal effect from the consumer price index to maritime transportation exports, as well as from the real effective exchange rate to the consumer price index. JEL Classification : Q56 , Q19 , Q11

Keywords

• Maritime
• Maritime Transport Exports
• Real Effective Exchange Rate
• Inflation
• Foreign Trade

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