Abstract:

Determining the effects of changes in currencies or import prices is very important in terms of monetary policy practices. For developing countries such as Turkey, price instability is seen as a strong factor that makes economic development difficult. Therefore, the role of policy practices in economic activities is critical. The aim of this study was to examine the transitional impact of foreign exchange rates and import prices in Turkey on consumer prices for the 201: Q1-2020: Q1 period. In this context, the nominal exchange rate, the total import price index, the real non-clean domestic revenue and the consumer price index variables were used. In the analysis, first ADF and KPSS unit root tests were applied. The ARDL method was applied after the stagnation stages of the variables were detected. According to the results of the analysis, there is a combination relationship between the variables. It has also been observed that exchange rates, import prices and income have significant effects on consumer prices both in the long and short term. Over the long term, when the nominal exchange rate rises by 1%, inflation also rises by 0.61%. In addition, the 1 percent increase in the total import price index resulted in an increase of 0.46 percent in inflation.

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