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GENERALLY VIEW OF
TURKISH MONETARY POLICY
Turkey’s monetary policy is slight different in some respects.
Turkey’s monetary strategy observes four additional principles, which I will now explain. ...
Third, it observes the requirements for transparency, accountability, and predictability, all of which are the special features of its monetary policies. ... Its policy design process looks first at past figures or developments and then thinks about the future. ...
Inflation (%, year-on-year)
Theoretical and empirical studies show that monetary policy contributes to disinflation primarily in the long term and almost not at all in the short term. Monetary policy must therefore be pursued consistently over long periods. The money base is an important element in guiding monetary policy. ... Moreover, public consumption and investment expenditures continued to rise significantly in spite of the contractionary fiscal policy which had been applied by the government since the beginning of 1998. ... Due to the contractionary income policy, the decline in real wages and salaries in the public sector affected private consumption expenditures negatively in 1998. ...
SOME CHANGES IN TURKISH MONETARY SYSTEM
For the purpose of achieving harmonization with the EU Central Banks System, amendments to certain parts of the Law on the Central Bank of the Republic of Turkey (TCMB) are necessary; namely the duties of the Bank, its independence, and its relations with public institutions. The new Law will include the following:
• The main objective of TCMB is to ensure price stability and determine monetary policy and policy instruments,
• With regard to the institutional independence of TCMB, no authority will give recommendations and instructions to the Bank in a way to affect its decision making process,
• The 51 percent share of the Treasury in the Banks capital will be reduced.
• The Bank will not provide credit facilities to public institutions and organizations,
• The Bank will establish a Monetary Policy Board to ensure price stability,
• The Bank will be in charge of, and authorized for, establishing payment systems and making all necessary arrangements, thereby ensuring the continuous functioning of these systems,
• The Bank will be authorized to collect statistical data from real and legal persons, when deemed necessary,
• The terms of the vice presidents will be arranged in parallel to that of the president.
Approximate Word count = 1501
Approximate Pages = 6
(250 words per page double spaced)
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