Foreign exchange rate increases amid fluctuating foreign trade

According to the exports data for the first four months of 2014, when compared to the first four months of 2013 of the low-rate period, we cannot say there was a ‘boost’ in exports, whereas the increase in the foreign exchange rate is not at all a small one The structure based on a low foreign exchange rate policy that Turkey has been following for some time due to the effect of changes in the economic and political climate, both internationally and domestically, has come to an end.

We are now in a new climate, the effect of which has been felt more in 2014 and which is based on a relatively more realistic foreign exchange rate. The effect of this can be seen immediately on foreign trade and in connection with that in the current account deficit.

How did the transition from low rate to a more realistic rate affect imports and exports?

Theoretically, it is argued that a realistic foreign exchange rate is a boost of morale for exporters, because they gain more money in terms of local currency, while it also becomes a lever for exportation. The dollar exchange rate which was 1.80 Turkish Liras or 2.34 euros in May 2013 has hiked, leading one to ask whether exports were affected positively by that as expected and whether there were noticeable increases in exports.

According to the exports data for the first four months of 2014, when compared to the first four months of 2013 of the low-rate period, we cannot say there was a “boost” in exports, whereas the increase in the foreign exchange rate is not at all a small one.

Automotive, textiles, food

During the April 2013-April 2014 period, the monthly average of the U.S. dollar increased from 1.80 liras to 2.13 liras...