New monetary policy apporach in Turkey against financial systemic risk.

Abstract

This paper explains the underlying motivation for the decision of the Central Bank of the Republic of Turkey (CBRT) to adopt a flexible monetary policy since 2010. In this context the paper provides an overview of the framework and summarizes the initial results. Specifically, the paper begins by giving a histori-cal perspective to provide motivation, then presents an overview of the key changes to the framework, including both monetary and macro-prudential in-struments. Lastly, the study lays out a discussion of the initial outcomes owing to the changes to the new monetary policy framework.