Abstract:

The Bretton Woods Monetary System, established after the First World War, ended in the 1970s and began transformation in the international financial and trade system from this date. This has led to the decision-making of the country’s economic governments and policy makers; the exchange rate systems to be implemented, the level of exchange rate, reserves and open currency issues to the forefront. Thus, the rapidly rising international trade transparency and the rapidly growing international capital flows have forced countries to be more cautious in the matters of predicting and determining their policies of many key international variables. After the transition to the wave currency system in this study, the international reserves that the Central Bank of the Republic of Turkey began to keep, the level of the currency rate and a reflection of international trade, the open data were studied in monthly frequencies for the period 2000:08-2019:12 . In the study, the dual Granger Cause Analysis used to explain the relationship between the variables. The study concluded that changes in currency levels were the cause of change in reserves in Granger, but the reverse was not valid. In addition, the change in reserves does not apply the opposite while the Granger cause of the currency gap.

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