Monetary policy tools applied in crisis case of the fragile five economies

The balance of payments chosen in accordance with the macroeconomic balances of a country is of importance in terms of controlling inflation, controlling unemployment, creating economic growth and creating an investment environment. It is seen that many crises that occurred in the global dimension after the 1980s adversely affect the developing market economies. It is generally known that the crisis started in a country's economy and spread to emerging markets. When financial liberalization is not well managed, coupled with the problems in the financial structure, insufficient financial infrastructure and macroeconomic instabilities, it is seen that it causes fragility in economies and can lead countries to crisis. Studies show that fixed exchange rate regimes and financial liberalization implemented by fragile five countries before 2000 could not be managed properly and caused economic deterioration due to deterioration in current account balance and generally balance of payments. After 2000, it was seen that portfolio investments shifted towards developing economies with high returns and these countries remained cautious against the effect of capital on exchange rate. It was found that short-term debts limited the intervention area of fragile five countries and their macroeconomic size was fragile. At the same time, it was concluded that the independence of the central bank in the formulation of monetary policy in order to overcome the crisis is important along with proper financial infrastructure and financial sustainability.