An Assessment of the policy shifts of the Turkish Central Banking since 2001

Şenyarar Bayrak, İpek
The understanding of central banking has evolved several times in the history. Different economic and political conditions shaped the structure of monetary policy and the stance of central banks. The Central Bank of Republic of Turkey (CBRT) also has experienced several reactionary policy shifts throughout its history. Nowadays, majority of central banks have started to follow financial stability programs after the Global Financial Crisis of 2008-09. The CBRT was one of the followers of financial stability targeting and has started to implement a new monetary policy structure after the Global Financial Crisis. The new monetary policy of the CBRT in which the financial stability was put nearby price stability came up with new challenges. Therefore in this thesis, we elaborate on the challenges of the CBRT and propose policy suggestions for the possible deficiencies of the new structure of the CBRT. We argue that the experiences of the CBRT in the inflation targeting period and the macroeconomic conditions of both during and post crisis period have shaped the new structure of the monetary policy, and the new policy mix of the CBRT may not be successful in all its targets at the same time because of the existence of “macroeconomic quadrilemma” tradeoffs as well as because of the ineffectiveness of the tool portfolio of the CBRT.


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Citation Formats
İ. Şenyarar Bayrak, “An Assessment of the policy shifts of the Turkish Central Banking since 2001,” M.S. - Master of Science, Middle East Technical University, 2013.