Reserve Options Mechanism

Koray Alper, Hakan Kara and Mehmet Yorukoglu

Central Bank Review, 2013, vol. 13, issue 1, 1-14

Abstract: Recently, Central Bank of the Republic of Turkey designed new policy instruments in order to reduce the adverse impact of volatile capital flows on macroeconomic and financial stability. This paper aims to introduce one of the new instruments: "Reserve Options Mechanism" (ROM). We describe the transmission channel of the ROM and compare it with alternative instruments. Our analysis concludes that ROM has the potential to be a useful policy tool for macroeconomic and financial stability.

Keywords: Monetary policy; Capital flows; Financial stability (search for similar items in EconPapers)
JEL-codes: E52 E58 F31 F32 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:tcb:cebare:v:13:y:2013:i:1:p:1-14

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