Abstract:

While exchange rates show the competitiveness of countries in foreign trade, they are also important for the country's economy, investors and financial markets in terms of the value of the national currency. The volatility in exchange rates may create serious uncertainty on important economic indicators such as inflation, interest rate, foreign trade, and as a result, economic and financial turbulences may occur. Therefore, determining the dynamics that may have an impact on exchange rates becomes a much more important issue, especially for developing countries that have capital shortages. In these respects, the aim of the study is to determine the macroeconomic factors affecting the Euro and Dollar exchange rates in Turkey using the monthly data for the period January 2010-November 2021 with the two dependent variable MARS method. The importance of determining the factors affecting exchange rates in terms of the country's economy and the fact that the method of the study has been found in a few studies in the literature is the source of motivation for the study. Since the data within the scope of the research are in monthly frequency, they are seasonally adjusted by the STL decomposition method. The stationarity levels of all variables were investigated with Augmented Dickey-Fuller and Phillips-Perron unit root tests and it was found that all of them were stationary at the first difference. The long-term relationship between the variables was revealed with the Johansen cointegration test. As a result of the analysis with the MARS method, which has two dependent variables, it is seen that the gold price and inflation variable affect the exchange rates positively. Moreover, the results show that the interest rate and money supply variables affect the exchange rates negatively below the critical value, and positively when it exceeds the critical value. The stock market index is not statistically significant on exchange rates.

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