Research Article Open Access

Currency Substitution in Turkey

Ismail H. Genc1, Hasan Sahin2 and Turan Erol3
  • 1 College of Business and Economics, University of Idaho, Moscow, Idaho 83844-3178, Turkey
  • 2 Department of Economics, The Faculty of Political Sciences The Ankara University, Ankara, Turkey
  • 3 Management Board Capital Markets Board Eskişehir Yolu 8. Km No: 156 06530, Ankara, Turkey


We investigated whether the recent depreciations in the Turkish currency (Lira) resulted in the currency substitution away from Lira by using quarterly data over the period from 1987:1 to 2000: 2 with M1 and M2 monetary aggregates and income, interest rate and exchange rate. Other than the variety of monetary aggregates, we tried different ways of including the interest rate into the models to ensure the robustness of our results. Our analysis shows that the currency substitution in fact happened with Lira.

American Journal of Applied Sciences
Volume 2 No. 5, 2005, 920-925


Submitted On: 8 February 2005 Published On: 31 May 2005

How to Cite: Genc, I. H., Sahin, H. & Erol, T. (2005). Currency Substitution in Turkey. American Journal of Applied Sciences, 2(5), 920-925.

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  • Dollarization
  • Euroization
  • Transition Economies
  • Currency Substitution
  • Foreign Currency