Term structure of interest rates: A case study for Turkey

VI ABSTRACT The purpose of this study is to examine the overall structure of term structure of interest rates in Turkey and to determine the economic variables that affect the term premium between long term and short-term interest rates. First of all for this descriptive study a number of subject related questions were prepared, and then these questions were asked to the general managers of six banks in Kütahya of which three were private banks, through vis a vis conversation. At the last stage the answers got from them were documented and analyzed. The questions asked to the managers in the sample group, which directed this study were about interest rates in Turkey, the differences in the term premium, and the term structure of interest rates. This study consists of three sections. In the first part of the study, the different approaches of mainstream economists to interest rates were quoted. In the second part, term theories relating to term structure of interest rates were mentioned. In the last part, the gatherings of the interviews with banks managers in Kütahya about term structure of interest rates in Kütahya were presented and some recommendations on policy applications were given out in order for stabilizing term structure of interest rates in Turkey. Key Words: Interest Rates, Term Structure, Turkey, Theories of Term Structure of Interest Rates, Concept of Interest Thesis Title: Term Structure of Interest Rates: A Case Study for Turkey