In Turkey, the Monetary Policy, Exchange Rate Importance: Conditions Index (MCI) Analysis

Hakan Eryüzlü, Tayfur Bayat and İzzet Taşar
Additional contact information
Hakan Eryüzlü: İskenderun Teknik University
Tayfur Bayat: İnönü University
İzzet Taşar: Fırat University

Journal of Finance Letters (Maliye ve Finans Yazıları), 2019, vol. 34, issue 111, 51-78

Abstract: Central banks, are independent in modern economies of targets or tools. Central Bank of the Republic of Turkey (CBRT) has been independent since 2001 (with “transition to strong economy program”) in terms of tools it uses in order to assure price stability. The CBRT implements the “inflation targeting” regime, where the short-term interest rate is the main policy instrument and the exchange rate is mostly abandoned to the market mechanism. CBRT envisages that the exchange rate decreases the impact on Turkey’s economy, because of “inflation targeting” regime. But the argument that exchange rate is a significant variable has not ended. In the study, it is concluded that exchange rates are still as important a variable as interest rates for Turkey and Monetary Condition Index is an available rule for monetary policy in Turkey.

Keywords: Monetary Policy; Monetary Condition Index; Central Bank (search for similar items in EconPapers)
JEL-codes: B22 C22 E42 E52 E58 (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations:

Downloads: (external link)
https://dergipark.org.tr/tr/download/article-file/708843 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:acc:malfin:v:34:y:2019:i:111:p:51-78

DOI: 10.33203/mfy.455835

Access Statistics for this article

Journal of Finance Letters (Maliye ve Finans Yazıları) is currently edited by Süleyman Kale

More articles in Journal of Finance Letters (Maliye ve Finans Yazıları) from Maliye ve Finans Yazıları Yayıncılık Ltd. Şti.
Bibliographic data for series maintained by Süleyman Kale ().