Do oil prices affect the USD/YTL exchange rate: Evidence from Turkey
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This study aims at investigating the link between international oil prices and the exchange rate in the case of a small open industrial economy without oil resources - Turkey. Johansen cointegration and Granger causality tests are used to analyze the relationship between oil prices and the exchange rate in the period 1982:12-2006:5. We find that international real crude oil prices Granger cause the USD/YTL real exchange rate.