Abstract:

Today, as the phenomenon of globalization increases its influence, countries become more dependent on each other and become influenced by each other. In the process of globalization, it can be seen that the developments in the countries can be followed instantly, rapid changes are experienced and these changes spread very quickly to other countries. Foreign debt received in this context is exposed to negative effects of exchange rate as a result of globalization, crises and other factors. The underdeveloped and developing countries have preferred to borrow from other countries in solving both internal and external problems. One of the main reasons for these loans is to reach the development target. Our country resorted to external borrowing as developing countries do. However, borrowing in foreign currencies in developing countries can cause devaluation, which in turn leads to exchange rate risks. In this study, which analyzed the effects of exchange rate movements on Turkey's external debt stock, using data quarterly data for the period of 2005: 1 (January) - 2017: 6 (June), a total of 50 quarters was based on. The impact of currency movements in the exchange rate on Turkey's external debt stock was investigated by Granger causality analysis and it was found that there was no Granger causality effect. However, it was established that there is the Granger causality effect on Net Foreign Debt Stock / GNP of the Foreign Exchange Rate. A long-run relationship between exchange rate and net foreign debt stock exchange rate and net foreign debt stock/GNP was found.

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