As per the agreement, events like joint training programs, conferences, seminars, workshops between the CBRT
and the NBU will be organized.
In establishing fiscal discipline, the leading role of the Turkish Treasury and its coordination with CBRT
and other regulatory agencies should be underlined.
Model B: Variables/Series: FDI, HC, CBRT
, POLR, QLTLF
The new policy mix of the CBRT
entailed the joint use of the interest rate corridor between overnight borrowing and lending rates, liquidity policy and required reserves in addition to the policy rate.
I am very disappointed, as I wrote on Sunday in this column, that given the lack of credibility of the CBRT
and suspicions over its independence on monetary policy, it is very difficult to imagine the announced roadmap not being implemented.
Turkey's buffers against potential volatility in global investor risk appetite remain relatively thin as events in 2013-14 showed, when the CBRT
had to raise interest rates sharply to assuage market pressures and restore external financial stability.
Furthermore, the accumulation of banks' foreign assets in the reserve option mechanism (ROM) implies that gross international reserves may not be wholly under the control of the CBRT
, thus serving to limit the authorities' potential room for manoeuvre if there were a full scale external liquidity crisis.
With interest rate hikes seemingly off the table for now, and policy divergence between the CBRT
and other emerging market central banks becoming even more apparent, we anticipate the USDTRY cross will drift higher into year-end, towards the 2.
INF and RATE are extracted from the OECD database, whereas GDP, CRE, and RIN series are sourced from the CBRT
Typically, tradable sectors blamed the tight policy stand (high real TL interest rates) of successive CBRT
governors for the appreciation of the TL and therefore of the external deficits.
Monetary shocks and central bank liquidity with credit market imperfections, CBRT
Research and Monetary Policy Department Working Paper No: 09/6.
SBP has decided to conduct competitive auctions of Turkish Lira (TRY) Loan Facility using proceeds drawn under the Currency Swap Arrangement with CBRT
in order to enhance transparency in determination of market interest rates.