Financial Stability and Macroprudential Policy in Turkey

In the aftermath of the global financial crisis, the Central Bank of the Republic of Turkey (CBRT) designed and adopted a policy mix where reserve requirements, an asymmetric interest rate corridor and a reserve options mechanism (ROM) were used alongside the policy rate to reduce the negative effects of volatility in capital flows. This deployment of instruments helped to maintain the resilience of the Turkish financial system in the wake of external shocks. Authorities in Turkey have more recently implemented a coordinated policy mix of tight monetary policy along with accommodative macroprudential and fiscal policies to maintain price, financial and macroeconomic stability.Full Publication: 'http://ssrn.com/abstract=3101163' Macroprudential Frameworks, Implementation and Relationship with Other Policies