Global Liquidity, Current Account Deficit, and Exchange Rate Balance Sheet Effects in Turkey

Caliskan, Ahmet; Karimova, Amira

doi:10.1080/1540496x.2016.1216837

Cited by 9 publications

(7 citation statements)

References 22 publications

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“…The external debt of nonfinancial corporations climbed from around $28 billion in 2004 to $86 billion in 2014, while that of financial institutions went from $20 billion to $127 billion. 49 Furthermore, borrowing became more short-term. The share of short-term external debt reached 40 percent of the total external debt stock of financial and nonfinancial sectors in 2014.…”

Section: Dynamics Of the Post-2001 Growth Modelmentioning

confidence: 99%

Financialized Growth and the Structural Power of Finance: Turkey's Debt-Led Growth Regime and Policy Response after the Crisis

Zayim

2022

Politics & Society

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This article analyzes the Turkish central bank's “managed uncertainty” policy after the global financial crisis. During 2010–14, the central bank intentionally generated uncertainty around short-term interest rates, using the level of predictability faced by financiers as a tool to buffer the domestic economy from volatile capital flows. How did the central bank implement this unconventional policy? Building on interview data and public texts, the article argues that the surge in capital inflows after the crisis sourced a debt-led, financialized economic growth model and deepened Turkey's reliance on external financing. The central bank could diverge from the financial sector's policy preferences despite Turkey's increased foreign capital dependence because the availability of low-cost, ample, private funding opportunities temporarily expanded policymakers’ room to maneuver. However, operating vis-à-vis an unsustainable growth regime, the central bank had to revert to orthodoxy in 2014 due to declining investor confidence and capital flight. This article contributes to the literature on the structural power of finance by demonstrating how finance derives its structural power from funding financialized growth, not productive investments. It also shows that financial structural power varies based on the source and cost of external financing beyond the degree of foreign capital dependence.

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Section: Dynamics Of the Post-2001 Growth Modelmentioning

confidence: 99%

Financialized Growth and the Structural Power of Finance: Turkey's Debt-Led Growth Regime and Policy Response after the Crisis

Zayim

2022

Politics & Society

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“…The first is the decrease of surplus in goods account. The surplus of CA is mainly from the goods account, while the service account, income and current transfer account have always been in deficit 2 . China has established closer trade relations with East Asian economies since the completion of the China and ASEAN Free Trade Area (CAFTA) in 2010.…”

Section: B Responses Of Ca and Fa To Driving Factorsmentioning

confidence: 99%

“…Most of the existing studies consider the source of international imbalance is from domestic economic structure (Çalışkan and Karimova, 2017 [2]). Iavorschia (2014) [3] claim that the stability of BOP depends on the value of imports and exports, the degree of efficiency and product competitiveness, the price level, international services and the international markets position.…”

Section: Introductionmentioning

confidence: 99%

The Effects of RMB Internationalization on Balance of Payments in China

Ren¹,

Xiaomin²,

Zhao³

2018

Proceedings of the 2018 International Conference on Education, Economics and Social Science (ICEESS 2018)

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This study investigates the effect of RMB Internationalization on balance of payments (BOP) by using structural vector autoregressive model (SVAR) with data from January 2010 to December 2017. Empirical evidence shows that RMB Internationalization and RMB real effective exchange rate is the Granger causality of CA via interest rate. The appreciation of RMB real effective exchange rate is the main reason for the decease of the CA surplus in recent years. To FA, RMB internationalization shock is the most important source in the decrease of FA surplus. It indicates RMB exporting through FA is increasing as the acceleration of RMB internationalization. We further recommend that it is crucial for relevant departments to monitor the relationship between RMB Internationalization and the balance of BOP.

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“…Their findings showed that the currency rate positively and significantly affected the CA. [33] analyzed the causes of current account changes in Tukey between 2002 and 2014. The findings showed that the currency rate had a significant and negative effect on the CA.…”

Section: Introductionmentioning

confidence: 99%

Exchange Rate and Current Account Balance: Evidence from ASEAN-5 Countries

Anwar,

Suhendra,

Ginanjar

et al. 2023

Proceedings of the International Conference on Sustainability in Technological, Environmental, Law, Management, Social and Econ

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The aim of this paper was to analyse the impact of the exchange rate and other macroeconomic variables on the current account (CA) balance in 5 Southeast Asia countries between 1991 and 2021. The analysis of this study employs panel data model with fixed effect estimation. The findings show that the currency rate negatively and significantly impacts the CA balance in ASEAN-5 countries. Furthermore, inflation has significantly negative impact, while economic growth and FDI positively and significantly affect the current account. Therefore, developing countries in Southeast Asia need to maintain their exchange rate to reduce the widening current account deficit and sustain positive investor sentiment. Furthermore, they need to increase economic growth, FDI inflows and reduce the inflation rate to increase the current account.

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Global Liquidity, Current Account Deficit, and Exchange Rate Balance Sheet Effects in Turkey

Cited by 9 publications

References 22 publications

Financialized Growth and the Structural Power of Finance: Turkey's Debt-Led Growth Regime and Policy Response after the Crisis

Financialized Growth and the Structural Power of Finance: Turkey's Debt-Led Growth Regime and Policy Response after the Crisis

The Effects of RMB Internationalization on Balance of Payments in China

Exchange Rate and Current Account Balance: Evidence from ASEAN-5 Countries

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