Does Overvalued Turkish Lira Affect Turkey's Foreign Trade Competitiveness?
International Journal of Social Sciences and Humanity Studies, Vol. 4, No. 2, pp. 159-168, December 2012
10 Pages Posted: 25 Dec 2012
Date Written: December 25, 2012
Turkey's export growth has been increasing since 1980 and reached its peak in 2011 despite declines in different periods. The 2008 economic crisis that overvalued the exchange rates was a big obstacle to overcome for the Turkish exporters, and this diminishes their returns and thus lessened Turkey’s global strategic competitiveness. This study examines Turkey’s competition power against the BRIC countries seen as strong competitors to Turkey based on exchange rates and purchasing power parity. This study which is about purchasing power parity and exchange rates shows that real exchange rates affect trade volumes and Turkey’s RER has appreciated especially after 2010 and it lessened the competitiveness of Turkish companies.
Keywords: international competitiveness, exchange rates, competitiveness indicators
JEL Classification: F10, F13, F14, F40
Suggested Citation: Suggested Citation