International Conference on Eurasian Economies
12-14 October 2011 – Bishkek, KYRGYZSTAN
Paper detail
Paper ID : 241
Status : Paper published
Language : English
Topic : Finance and Financial Crises
Presenter: Prof. Dr. Şaziye Gazioğlu
Session : 1A Global Financial Integration
Recent Monetary Policy in Turkey: Capital Flow, Reserves and Exchange Rate
Recent Monetary Policy in Turkey: Capital Flow, Reserves and Exchange Rate
- Prof. Dr. Şaziye Gazioğlu (Middle Eastern Technical University, Türkiye)
Abstract
In this paper, we investigate the recent monetary policies and development of Turkish banking system during the post 2001 financial and banking crisis. We explore the effects of capital inflows and outflows to real exchange rates and the real stock market prices, before and after the financial crisis. We investigate the relationship between real exchange rate, real stock prices and capital flows. We decompose the foreign flows into real assets and liabilities, in order to investigate the possible long-term effect of inflows and outflows. Reversal of capital flow seems to create a possibility of exchange rate crisis. The Turkish Central Bank by taking lessons from this experience they formulate their recent policies accordingly. Recent Monetary Policy mix in Turkey aims to have financial stability by increasing the reserve ratio in each component of capital flows in Turkey. The ratio increases shorter the period of the asset. The Central Bank work claims to have an effect similar to inflation targeting.
JEL codes: G1, F3, F4
Gazioğlu, Şaziye (2011). "Recent Monetary Policy in Turkey: Capital Flow, Reserves and Exchange Rate" in Proceedings of International Conference of Eurasian Economies 2011, pp.1-7, Bishkek, KYRGYZSTAN.
DOI: https://doi.org/10.36880/C02.00241
Session 1A: Global Financial Integration
