Concerns over NIR that was regarded as a life-saver at the beginning have increased. It is observed that some central banks are watching for an opportunity to exit this implementation.
Financial conditions, conceptually, summarizes whether financial indicators such as interest rates, exchange rates, asset prices and credit conditions are being restrictive or accommodative on economic activity.
In a period marked by reduced uncertainties, an approach characterized by flexibility loses ground to one based on predictability, which in turn necessitates simplification of monetary policy.
Halil İbrahim Aydın,Velihan Başpınar,Eren Ocakverdi
In this blog post, we share our findings on the anchoring of inflation expectations through the inflation expectations of market participants, firms and households in Türkiye.
Ali İzzeddin Çelebi,Alper Tunga Demir,Ali Gencay Özbekler
In this blog post, we analyze the impact of the tight monetary policy stance to reduce the borrowing costs in the context of the re-issuance auctions held by the Republic of Türkiye Ministry of Treasury and Finance.
Among the measures recently taken in emerging economies against the foreign currency exposure of the corporate sector, decisions by the central banks of India and Indonesia stand out.
It is observed that central banks are willing to normalize their policies. Nevertheless, growth and employment developments worldwide, except for the USA, are not favorable enough to allow normalization at the moment.
The recent historically low level of the deviation index is a positive indicator of the effectiveness and predictability of monetary policy implementations.
Permanent price stability will protect people who believe and trust in our economy, restore the prestige of our currency, and, hence, help us face the future with confidence.
We observe that global liquidity has an impact on the magnitude of interest rate transmission. Yet, financial regulation is strengthened on a global scale and macroprudential policies are implemented in a broader spectrum, which may have weakened this impact.
Our findings suggest that measures taken to simplify the operational framework of monetary policy have significantly affected the liquidity management behaviors of banks.
The Turkish lira liquidity demanded by banks from the Central Bank is determined according to the funding need of the system and the types of assets accepted as collateral for Turkish lira (TL) liquidity facilities of the CBRT do not determine the funding need of the system.
The liraization strategy lays out a comprehensive policy framework that has been continuously improved to ensure that the Turkish economy achieves permanent price and financial stability.
The Fed started its balance sheet reduction program in the last quarter of 2017 and publicly announced its pace as well as its method. However, it did not make any commitment on the extent and deadline of this reduction. Following the recent slowdown in global growth, the Fed also suspended its policy normalization and announced that it would end the balance sheet reduction in September 2019 accordingly.In this note, we summarize that framework and evaluate its implications in terms of the balance sheet normalization.
In this blog post, we examine consumption expenditures across different income groups to enable better understanding of the recent monetary transmission mechanism.
In this blog post, we analyze the relation between the growth in FX deposits and the reduction in the FX-protected deposit balances in light of data, and interpret this relationship in the context of savers’ currency preferences.
In times of an elevated exchange rate risk, the demand for currency increases due to the hedging motive, which leads to a surge in both the level and the volatility in the currency swap market and the spot market.
Fluctuations in the prices of the food group that constitutes the bulk of the inflation basket can determine the level of inflation and inflation expectations in the short run.
Our empirical analyses show that macroeconomic fundamentals become more important for country risk premium for emerging economies particularly when the global risk appetite is not accommodative.
F. Pınar Erdem Küçükbıçakcı,Etkin Özen,İbrahim Ünalmış
Our findings indicate that the effectiveness of macroprudential policy tools depends on the phase of the credit cycle, i.e. whether credit growth is accelerating or decelerating.
A holistic approach incorporating joint efforts of all stakeholders in the disinflation process can ease the policy trade-offs and thus make a significant contribution to achievement of lasting price stability at lower costs.
Ahmet Bilal Kurtoğlu,Furkan Höçük,Ömer Batuhan Beşirli
Central banks, by virtue of the duties and powers vested in them by law, operate within a framework that, unlike that of commercial banks, pursues the public interest and does not seek to make a profit. Periodic loss announcements by central banks during extraordinary times are temporary and exceptional, as the literature points out, and thus do not serve as an indicator for assessing the effectiveness of monetary policy.
Uğur Namık Küçük,İbrahim Ethem Güney,Doruk Küçüksaraç
The TL-Settled Forward Foreign Exchange Auctions are expected to support the corporate sector’s exchange rate risk management capacity by facilitating access to a simple, deep and efficient hedging instrument.
The findings of our analyses suggest that seasons, days, feasts and wage payment periods cause significant fluctuations in the growth of currency in circulation.
When the exchange rate effect is ignored, the fluctuation in the money supply may seem larger than it actually is in periods of substantial changes in exchange rates, producing misleading signals. Monitoring high-frequency money supply developments in both exchange rate-adjusted and non-exchange-rate-adjusted terms may be a better idea in economies with a high share of FX deposits in the money supply.
According to the impact analysis, presented here in summary form, the conversion process from DDM deposits to Turkish lira accounts has not created an additional demand for FX. Moreover, after the regulations, the likelihood of firms with maturing accounts becoming net FX buyers has significantly decreased.
This blog post analyzes the impacts of the regulations announced on 20 August 2023 on deposit rates. The results of the analysis suggest that the regulation introduced on August 20 has promoted the conversion of FX-protected deposits to Turkish lira deposits, thereby supporting macro financial stability, the monetary transmission mechanism, and the monetary tightening process that started in June.
Ali Hakan Kara,Fethi Öğünç,Çağrı Sarıkaya,Mustafa Utku Özmen
The degree of exchange rate pass-through to inflation may vary depending on the economic environment. Currently, the weak economic activity is limiting the exchange rate pass-through, whereas the behavior of exchange rate expectations pose upward risks.
This blog post discusses the option value of the KKM as well as the factors determining savers’ preferences between the KKM and TL deposits. It also presents an evaluation of the impact of the CBRT’s steps to strengthen TL deposits from an investor perspective, and reveals that increasing the relative attractiveness of TL deposits has stimulated a decline in KKM balances.
