STOCK MARKET RETURNS AND EXCHANGE RATES IN TURKEY DURING COVID-19: THE ROLE OF GOVERNMENT RESPONSE AND ECONOMIC SUPPORT PACKAGES
STOCK MARKET RETURNS AND EXCHANGE RATES IN TURKEY DURING COVID-19: THE ROLE OF GOVERNMENT RESPONSE AND ECONOMIC SUPPORT PACKAGES

Summary/Abstract: The spate of the highly contagious COVID-19 pandemic has forced governments across the globe to take unprecedented actions including social distancing measures and economic support packages to mitigate the adverse effects of the deadly disease. The study examines the long-run (more than one year) impact of the COVID-19 pandemic on the Istanbul stock market (XU100) index using daily data for the period March 11, 2020, to June 3, 2021. The study finds a significant and positive impact of COVID-19 along with government response and economic support packages on Istanbul stock market returns in the long run. While appreciation of the USD (exchange rate) has a significant negative impact on the Istanbul stock market returns in longer periods. The study suggests that the government should carry forward the social distancing measures and extend the economic support packages to boost the confidence of the investors.

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