ANALYSIS OF THE RELATIONSHIP BETWEEN STOCK EXCHANGE INDEX AND THE EXCHANGE EXCHANGE METHOD: THE EXAMPLE OF TURKEY

Abstract

Exchange rates are one of the most important factors that affect the decisions and plans of all companies, especially those that engage in large and intense international trade. And the stock market is one of the channels in which the general economic situation of the countries and the effects of the political decisions taken on the economy are best monitored. This study aimed to analyze the relationship between stock market indices and exchange rates. The VAR method was used in the study to achieve this aim. For this purpose, the variables included in the analysis were investigated with the help of stationarity analysis ADF unit root tests. After ensuring the stationarity of the variables at the same level, the Granger causality test based on the VAR model was applied. In the study, the relationship between stock market indices and exchange rates was analyzed using monthly data from January 2008 to October 2021.