Analysis of the monetary policy applied in Turkey with fuzzy logic method

The concepts of transparency and independence are becoming increasingly important in the policy decisions taken by central banks in reaching their targets, in explaining the reasons for deviations from their targets and in their explanations about how much they can deviate from the target. Effective communication is essential as well as credible policy actions to achieve these goals. Central banks implementing inflation targeting as the monetary policy strategy, publish various textual materials as a result of the communication strategies which they have developed as a requirement of the transparency, accountability and reliability principles which are the prerequisites of this strategy. When the decisions and discourses of Central Bank of Republic of Turkey are evaluated together, the harmony of Central Bank's policies with administrative transparency and accountability factors determines its institutional credibility. What the Central Bank does, whether it uses a model or not, and if so, what this model is not shared with the public. The uniqueness of the policy stance expressed by the Central Bank of the Republic of Turkey may not coincide with the decisions taken for each period, and that there may be different degrees of tightness for the monetary policy stance. In this context, the different degrees of tight stance that characterizes the monetary policy implemented by the Central Bank are investigated with the fuzzy logic method, which acts with the philosophy of multiple logic. In the wake of fuzzy C-Mean clustering within the scope of the rule-based fuzzy logic model, a classification done for the policy stance of the Central Bank. Accordingly, in the classification revealed by the analysis, it was concluded that the policy stance was grouped as loose, medium and tight. The policy stance that the Central Bank declared to be adopted and the model outputs did not show similarity for each and every period.