Evaluating Economic Resilience: Lighting the Nexus Between Turkish Imports and Foreign Exchange Reserves

Tekin, Bilgehan

doi:10.2478/sbe-2024-0055

Abstract

This study investigates the relationship between Türkiye’s imports and foreign exchange reserves, aiming to provide detailed information about Türkiye’s economic dynamics by using data from October 2002 to July 2022 and several robust methodologies, including ARDL Bound tests, Johansen co-integration tests, FMOLS, DMOLS and VECM Granger. The findings reveal a stable long-term balance between imports and foreign exchange reserves and a bidirectional causality that enriches the understanding of the dynamic interaction. This study advances the academic discourse on Türkiye’s economic resilience and provides valuable information to policymakers navigating the complex landscape of import-reserve dynamics in Türkiye.

References

Ahad, M., & Dar, A. A. (2018). A dynamic relationship between financial development and import demand for Bangladesh: An evidence from combine cointegration and Granger causality approach. Global Business Review, 19(3), 543-555.
Search in Google Scholar Back to article
Al Abri, I., Saboori, B., & Al Humaidi, R. (2023). The dynamics of the relationship between foreign exchange reserves and import demand function. Cogent Economics & Finance, 11(1), 2189623.
Search in Google Scholar Back to article
Arize, A. C., & Malindretos, J. (2012). Foreign exchange reserves in Asia and its impact on import demand. International Journal of Economics and Finance, 4(3), 21-32.
Search in Google Scholar Back to article
Arize, A. C., & Osang, T. (2007). Foreign exchange reserves and import demand: Evidence from Latin America. World Economy, 30(9), 1477-1489.
Search in Google Scholar Back to article
Arize, A. C., Malindretos, J., & Grivoyannis, E. C. (2004). Foreign exchange reserves and import demand in a developing economy: the case of Pakistan. International Economic Journal, 18(2), 259-274.
Search in Google Scholar Back to article
AYDIN, S., Ceylan, N. B., & Kapusuzoğlu, A. (2022). Merkez Bankalarının Rezerv Tutma Sebepleri Ve Optimal Rezerv Miktarının Tespitine İlişkin Bir Değerlendirme. Ekonomi İşletme ve Maliye Araştırmaları Dergisi, 4(3), 244-269.
Search in Google Scholar Back to article
Aziz, M. N., & Bhaban, M. Y. (2012). Modelling of import demand function for a developing country: An empirical approach. Indian Journal of Economics and Business, 11(3).
Search in Google Scholar Back to article
Bahmani-Oskooee, M., & Rhee, H. J. (1997). Structural change in import demand behavior, the korean experience: a reexamination. Journal of policy Modeling, 19(2), 187-193.
Search in Google Scholar Back to article
Carone, G. (1996). Modeling the US demand for imports through cointegration and error correction. Journal of policy Modeling, 18(1), 1-48.
Search in Google Scholar Back to article
Cheng, T., & Zhu, J. (2020). An Empirical Analysis about Optimal Scale of China’s Foreign Exchange Reserves. Journal of Service Science and Management, 13(2), 357-376.
Search in Google Scholar Back to article
Cheng, T., & Zhu, J. (2020). An Empirical Analysis about Optimal Scale of China’s Foreign Exchange Reserves. Journal of Service Science and Management, 13(2), 357-376.
Search in Google Scholar Back to article
DEMİR, Y. (2020). Türkiye İçin Döviz Rezerv Yeterlilik Göstergelerinin Değerlendirilmesi. Ömer Halisdemir Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 13(3), 413-425.
Search in Google Scholar Back to article
Dutta, D., & Ahmed, N. (1999). An aggregate import demand function for Bangladesh: a cointegration approach. Applied Economics, 31(4), 465-472.
Search in Google Scholar Back to article
Effiong, U. E. (2022). Foreign Exchange Reserves and Import Demand in a Developing Economy: New Evidence from Nigeria. International Journal of Management, Accounting & Economics, 9(7).
Search in Google Scholar Back to article
Emran, M. S., & Shilpi, F. (1996). Foreign exchange rationing and the aggregate import demand function. Economics Letters, 51(3), 315-322.
Search in Google Scholar Back to article
Emran, M. S., & Shilpi, F. (2010). Estimating an import demand function in developing countries: A structural econometric approach with applications to India and Sri Lanka. Review of International Economics, 18(2), 307-319.
Search in Google Scholar Back to article
Frenkel, J. A. (1974). The demand for international reserves by developed and less-developed countries. Economica, 41(161), 14-24.
Search in Google Scholar Back to article
Giovannetti, G. (1989). Aggregate imports and expenditure components in Italy: an econometric analysis. Applied Economics, 21(7).
Search in Google Scholar Back to article
Hariadi, S., Tayibnapis, A. Z., & Irawati, N. (2020, January). How do Exports and Imports Distress Foreign Exchange Reserves in Indonesia? A Vector Auto-Regression Approach. In 17th International Symposium on Management (INSYMA 2020) (pp. 209-213). Atlantis Press.
Search in Google Scholar Back to article
Heller, H. R. (1966). Optimal international reserves. The Economic Journal, 76(302), 296-311.
Search in Google Scholar Back to article
Hossain, M. A. (1995). Inflation, economic growth and the balance of payments in Bangladesh: A macroeconomic study. Delhi: Oxford University Press.
Search in Google Scholar Back to article
Irwin, D. A. (2020). Free trade under fire. Princeton University Press.
Search in Google Scholar Back to article
Islam*, A. M., & Kabir Hassan, M. (2004). An econometric estimation of the aggregate import demand function for Bangladesh: Some further results. Applied Economics Letters, 11(9), 575-580.
Search in Google Scholar Back to article
KILCI, E. N. (2019). Türkiye Rezerv Yeterliliği: Rezervlerin İthalat Ve Kısa Vadeli Dış Borçlarla Karşılaştırılması Üzerine Bir Analiz. Ömer Halisdemir Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 12(4), 578-588.
Search in Google Scholar Back to article
KONAT, G., ZEREN, F., & ERGÜN, S. (2017). ULUSLARARASI REZERVLER VE İTHALAT İLİŞKİSİ: TÜRKİYE ÖRNEĞİ. Kastamonu Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 19(4), 50-59.
Search in Google Scholar Back to article
Mah, J. S. (1997). Cyclical factors in import demand behavior: The Korean experience. Journal of Policy Modeling, 19(3), 323-331.
Search in Google Scholar Back to article
Marston, R. (1971). Income effects and delivery lags in British import demand: 1955–1967. Journal of International Economics, 1(4), 375-399.
Search in Google Scholar Back to article
Moran, C. (1989). Imports under a foreign exchange constraint. The World Bank Economic Review, 3(2), 279-295.
Search in Google Scholar Back to article
Nikensari, S. I., Puspitasari, N. F. D., & Pujiati, A. (2020). Demand and strategy of imports in declining foreign exchange reserves.
Search in Google Scholar Back to article
Özbay, Ü. (2021). TÜRKİYE’NİN SANAYİ ÜRETİMİ İLE DIŞ TİCARETİ ARASINDAKİ İLİŞKİ: 2001-2009 DÖNEMİ İÇİN DEĞERLENDİRMELER. Verimlilik Dergisi, (4), 153-165.
Search in Google Scholar Back to article
Raddatz, C. (2007). Are external shocks responsible for the instability of output in low-income countries?. Journal of Development Economics, 84(1), 155-187.
Search in Google Scholar Back to article
Sinha, D. (2001). A note on trade elasticities in Asian countries. The International Trade Journal, 15(2), 221-237.
Search in Google Scholar Back to article
SÜLEYMANLI, C. (2022). Analysis of the Factors Affecting the Gross Foreign Exchange Reserve Adequacy of the Central Bank of the Republic of Turkey with Logit and Probit Methods. Anadolu İktisat ve İşletme Dergisi, 6(1), 54-68.
Search in Google Scholar Back to article
Sultan, Z. A. (2011). Foreign exchange reserves and India’s import demand: A cointegration and vector error correction analysis. International Journal of Business and Management, 6(7), 69.
Search in Google Scholar Back to article
Tang, T. C. (2003). Japanese aggregate import demand function: reassessment from the ‘bounds’ testing approach. Japan and the World Economy, 15(4), 419-436.
Search in Google Scholar Back to article
Tennakoon, T. U. (2010). Price and income elasticities of disaggregated import demand in Sri Lanka. Staff Studies—Central Bank of Sri Lanka, 40(1-2), 59-77.
Search in Google Scholar Back to article
The Central Bank of the Republic of Türkiye (CBRT). 2023. “Reserve Management“ https://www.tcmb.gov.tr/wps/wcm/connect/TR/TCMB+TR/Main+Menu/Temel+Faaliyetler/Rezerv+Yonetimi#:~:text=Merkez%20Bankas%C4%B1%2C%20rezervlerin%20y%C3%B6netiminde%20%C3%BClke,riske%20sahip%20yat%C4%B1r%C4%B1m%20ara%C3%A7lar%C4%B1nda%20de%C4%9Ferlendirir
Search in Google Scholar Back to article
Zaibet, L., Al Siyabi, M., Boughanmi, H., Al Abri, I., & Al Akhzami, S. (2022). Doing business in the COMESA region: The role of innovation and trade facilitation. Perspectives on Global Development and Technology, 21(2), 169-187.
Search in Google Scholar Back to article

Evaluating Economic Resilience: Lighting the Nexus Between Turkish Imports and Foreign Exchange Reserves

Abstract

Paradigm

My account