Akademik Veri Yönetim Sistemi
Journal of Yasar University, cilt.18, sa.70, ss.237-251, 2023 (Hakemli Dergi)
The exchange rate, which is defined as the value of one unit of foreign currency against the national currency or the value of one unit of national currency against foreign currency, has an impact on the inflation of countries that depend on foreign inputs in their domestic production, especially since it interacts with foreign trade. As a result of the fragilities created by the policies implemented in the country or external shocks, the five countries that lost the most value against the US dollar among the currencies of the developing countries were defined as the Fragile Five by Morgan Stanley. In this context, in this study, it is aimed to determine the longterm and short-term relationship (the existence of cointegration) between the exchange rate and inflation with the monthly data of the 1990:M1-2020:M12 period obtained from the IMF online database for the countries defined as the Fragile Five. After determining the existence of cointegration, ARDL test was applied to determine the effect of exchange rate on inflation. The findings show that there is cointegration between the exchange rate and the inflation rate in the countries included in the study. In addition, it has been determined that the exchange rate has no significant effect on inflation in the long run for Brazil, Türkiye and India, while it has significant effect on in Indonesia and South Africa.