EXCHANGE RATE PASS-THROUGH UNDER RESERVE ADEQUACY CONDITIONS: EVIDENCE FROM HEADLINE AND CORE INFLATION DYNAMICS IN TÜRKİYE

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Benli M., Taş H., Ekinci A.

15. ULUSLARARASI NEW YORK SOSYAL, BEŞERİ, İDARİ VE EĞİTİM BİLİMLERİNDE AKADEMİK ÇALIŞMALAR KONGRESİ, New York, Amerika Birleşik Devletleri, 3 - 05 Mayıs 2026, cilt.1, ss.1, (Tam Metin Bildiri)

  • Yayın Türü: Bildiri / Tam Metin Bildiri
  • Cilt numarası: 1
  • Basıldığı Şehir: New York
  • Basıldığı Ülke: Amerika Birleşik Devletleri
  • Sayfa Sayıları: ss.1
  • Bilecik Şeyh Edebali Üniversitesi Adresli: Evet

Özet

ABSTRACT

This study examines exchange rate pass-through under reserve adequacy conditions in Türkiye using monthly data from 2000M01 to 2025M12. Rather than treating pass-through as a constant average relationship, the analysis investigates whether the inflationary effect of exchange rate movements changes when external liquidity conditions weaken. Reserve adequacy is proxied by the months of import cover of reserves, and a low import-cover regime is interacted with exchange rate changes. Dynamic models are estimated using Newey-West heteroskedasticity- and autocorrelation-consistent standard errors, with separate specifications for headline and core inflation. The findings indicate a robust and economically meaningful exchange rate pass-through to headline inflation. However, the evidence that low import-cover conditions significantly amplify headline CPI pass-through is weak. In contrast, the core inflation results reveal a stronger state-dependent pattern: the interaction between exchange rate changes and low import-cover conditions is positive and statistically significant, suggesting that external vulnerability is more closely associated with persistent underlying inflation dynamics than with headline inflation. Auxiliary import-price results are interpreted cautiously because the import-price series does not provide a clean domestic-currency import-cost channel. Overall, the study shows that exchange rate pass-through remains central to Türkiye’s inflation dynamics, but the role of reserve adequacy is inflation-measure specific.

Keywords: Exchange rate pass-through; reserve adequacy; import-cover ratio; headline inflation; core inflation