The impact of unconventional monetary policies on macroeconomicindicators: The case of Turkey

Before the 2008 global financial crisis, the most important monetary policy instruments traditionally used by central banks were open market operations and interest rates. However, with the 2008 crisis, it was seen that the monetary policy instruments used by the central banks in the traditional sense were insufficient. Therefore, new monetary policy instruments have been developed. The new instruments developed such as quantitative easing, credit expansion, interest commitment, interest rate corridor, required reserves and reserve option mechanism stand out as unconventional monetary policy instruments. The effectiveness of monetary policies is important in achieving the goals of central banks such as price stability and financial stability. In this context, the aim of the study is to examine the effects of unconventional monetary policy instruments applied in Turkey after the 2008 crisis on macroeconomic indicators. While the policy rate, reserve option mechanism utilization rate, TL and foreign currency reserve requirement ratios variables are used to represent the unconventional monetary policy instruments implemented in Turkey in the study; In terms of macroeconomic indicators, consumer price index, industrial production index, unemployment rate, real effective exchange rate, current account deficit, total credit volume, money supply, manufacturing industry capacity utilization rate, BIST 100 index and short-term capital movements variables are used. Monthly data of the variables covering the January 2008- March 2022 period were analyzed using the Vector Autoregression (VAR) model. vii As a result of the analysis, it was concluded that the impact of unconventional monetary policy instruments on macroeconomic indicators in the Turkish economy is limited. Keywords: Unconventional Monetary Policies, Interest Rate Corridor, Reserve Requirements, Reserve Option Mechanism, Var Analysis.