Özet:

This study examines the effect of real exchange rate uncertainty on fixed capital investment in private sector in Turkey using yearly time series data between 1970-2004 period. Reel interest rates and net credits / GDP ratio variables are used as other independent variables in the model. Reel exchange rate uncertainty variable is produced by ARIMA modeling. An error correction model is developed and used to estimate the coefficients. The results demonstrate that net banking credits to GDP ratio variable positively and reel interest rates negatively affect the fixed capital investment to GDP ratio, as expected. The reel exchange rate uncertainty has found to be negative and significant effect on fixed capital investment. The results support the idea that exchange rate uncertainty does matter for private sector investments in Turkey.

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