Monetary policies implemented in Turkey after 1980 impact on inflation

In order to combat inflation in the Turkish economy, solutions have been sought through different policy channels at different times, depending on the conditions and structure of the country at that time. Especially after 1980, when the country's economy started to take steps towards opening up to the outside world, the policies implemented and the decisions taken have become more important in economic terms. This study investigates the content of the monetary policies implemented from 1980 to 2023 and their effectiveness on inflation. From 1980 until early 2009, when the impact of the global financial crisis on the Turkish economy started to diminish, the monetary policies implemented by the Central Bank failed to have a long-term effect on inflation. The reason for the failure to achieve price stability is thought to be the crises stemming from the structural problems that affected the Turkish economy the most, and the failure of the decisions and policies taken afterwards to provide a solution in the long run. While the effectiveness of monetary policy on inflation produced positive results until 2002-2007 as a result of the reforms made to solve structural problems, this balance was disrupted again with the global crisis. In this study, the effect of the monetary policy implemented in Turkey on the inflation rate is analyzed by unit root test and then ARDL bounds test approach over the monthly data between 2009:01-2023:04. The variables used in the study are foreign trade balance, deposit interest rate, aggregate money supply, total reserves, rifle-based real effective exchange rate, growth rates and, as a dummy variable, interest rate cuts that started to be reduced in September 2021. According to the results, deposit interest rates, money supply, reserves and industrial production index are positively correlated with inflation.