Examination of the effect of monetary policy on selected market indicators: Turkish implementation

The aim of this research is to examine the effects of monetary policies on capital market efficiency. Within the scope of the research, a study was conducted to examine the effects of monetary policy instruments on Capital Market efficiency in Turkey. Various data were used to define monetary policy and capital market within the scope of the research. All data were obtained from the CBRT EDDS. Data were provided on a 3-month basis, covering the period 2010Q1 to 2022 Q1. The data have been deflated with the 2010-based CPI in order to be free from inflation. The logarithmic forms of the M1 money supply and GDP variables were used for the data. In the research, unit root test and Granger causality test were applied. CBRT policy interest rates are effective on BIST 100 value, CPI, GDP and M1 money supply at least 1 year later. Again, reserve requirement ratios are effective on the CPI value after 1 year. This shows that monetary instruments are effective on capital market instruments in the long run. Key Words: Monetary Policies, Capital Markets, Turkey