Interest rate policy of the Central Bank of the Republic of Türkiye and its effects on the banking sector after the COVID-19 pandemic

In this study, the interest rate policy of the Central Bank of the Republic of Turkey and its effects on the Turkish banking sector after the Covid-19 pandemic were analyzed. While the pandemic process increased economic fragility on a global scale, it created the need for monetary authorities to use expansionary policy tools effectively. In this context, the effects of the interest rate reductions, liquidity supports and credit incentive mechanisms implemented by the CBRT on the banking sector were examined. In the theoretical part of the study, currency correlation tools and the CBRT's correlation framework were explained in detail; in the practical part, the effects of the measures taken in the post-Covid-19 period on sector dynamics were evaluated using econometric methods. The findings reveal that changes in interest rates create significant effects on the banking sector's credit volume, asset quality and profitability indicators. In conclusion, it can be seen that the interest rate policies followed by the CBRT in the post-randemi period played a critical role in preserving the financial stability of the banking sector and supporting economic recovery.