Question

Discuss the interest rate policy of Turkish Central bank during the period of 2018-2020.

Answer 1

Interest rate policy of Turkish Central Bank were highly focused at maintaining a high level of interest rate in order to maintain the inflation in the economy.

It was inclusive of-

A.increase in the interest rate because of increase in the inflation in the economy.

B.there has been a large amount of money flow in the economy so Central banks have increased their rate of interest in order to curb the amount of money flow.

C. There has been a devaluation of Turkish lira so sach monetary policy has been framed that is stability could also be offered to the domestic currency

D.it has also increased the required result ratio on the part of the bank so that money flow can be controlled and inflation can be cut to a higher extent

E. It has also lead to Central bank adopting a policy which is highly focused at quantitative tightening rather than quantitative easing.