Anchors in Implementation of Moneraty Policies in Turkey in 1990’s

In this study, the monetary and exchange rate policies followed by the Central Bank of Turkey (CBT) in the period between 1990 and 2000 are examined with the help of anchors. The CBT executed the monetary policies by means of monetary programs. In order to increase its credibility and reduce inflation, the Central Bank of Turkey established binding rules through these monetary programs between 1990 and 2000. These rules are called anchors. There are varieties of anchors ranging from foreign exchange rates to inflation targeting. In the first section of this study, anchors, aspects of ideal anchors, the independence and credibility of the Central Bank are examined theoretically. In the second section, there is an empirical analysis of the monetary and exchange rate policies implemented in Turkey in the period between 1990 and 2000. In conclusion, the problems encountered in application of anchors are determined.