Causal Relat？onsh？p Between Exchange Rate And Interest Rates: 2006-2018

The purpose of this study is to examine the relationship between exchange rate and nominal interest rate in Turkey using monthly data from M1 of 2006 to M06 of 2018. Firstly, stationarity analysis of the related variables was made. According to the findings both variables have unit roots. cointegration test has been tested with Johansen cointegration test since the level of cointegration of the series is same. It is found that , there is no cointegration relationship between these variables. Finally, since there ise no cointegration between variables Granger causality test results, whichs based on VAR analysis show there is a bidirectional causality between the variables