A Glance at 2019

FOCUSING ON PRICE STABILITY AND CONTRIBUTING TO FINANCIAL STABILITY

In line with its objectives of achieving price stability and contributing to financial stability, the CBRT continued to make use of an appropriate mix of monetary policy and liquidity tools to support the predictability of the monetary policy.

• The CBRT uses the one-week repo rate as its policy rate. In line with the improvement in the inflation outlook, the policy rate was reduced to 12% by the end of the year following the strong rate cuts delivered in July, September, October and December.
• Banks intensively used the CBRT’s swap facilities in the face of the developments throughout 2019, and the majority of the funding need of the system was provided via the swap facilities of the CBRT. Accordingly, the funding via Open Market Operations (OMO), which was mostly done by one-week repo auctions, declined.
• In August, it was decided that the Turkish lira currency swap transactions, which used to be executed with one-week maturity via the quotation method, would also be executed with one, three and six-month maturities via the traditional auction (multiple-price) method.
• The CBRT continued to take several steps to bring out domestic gold savings into the financial system. To contribute to increasing the effectiveness of banks’ liquidity management and bringing out gold savings into the financial system, the Turkish Lira Gold Swap Market on the buy side and the Foreign Exchange Gold Swap Market on the buy and sell sides were opened at the CBRT in May and October, respectively.
• The CBRT determined its monetary policy stance in way to ensure the continuation of the disinflation process, and also made effective use of macroprudential tools such as reserve requirements (RR) for financial stability purposes. It made some changes on reserve requirements to allow the use of this facility in a more flexible and effective way as a countercyclical macroprudential tool to support its main monetary policy tool.
• An amendment to the CBRT Law in July enabled not only banks’ liabilities but also their on- and off-balance sheet items deemed appropriate to be subjected to reserve requirements.
• In August, the reserve requirement ratios for Turkish lira (TL) liabilities and the remuneration rates for Turkish lira-denominated required reserves were linked to the annual growth rates of TL cash loans.
• In December, the reserve requirement regulation was revised with a view to supporting financial stability by encouraging the channeling of loan supply to production-oriented sectors rather than consumption-oriented ones. The aim of this revision was to encourage long-term commercial loans that had a strong relation with production and investment, and long-term housing loans that had a weak relation with imports.
• In December, reserve requirement ratios for FX deposits/participation funds (excluding deposits/participation funds obtained from banks abroad) and borrower funds were linked to the real growth rates of TL cash loans.

PLAIN, EFFECTIVE AND BILATERAL COMMUNICATION

The CBRT pursued a plain, effective and bilateral communication policy in 2019.

• A total of 19 new analyses were posted on the corporate “CBRT Blog” that enables the CBRT staff to share their views with the public, open these views for debate and offer timely contributions to the economic agenda.
• The “Economics for All” initiative, which was introduced to raise awareness about the importance of price stability and provide different shareholders with economics training, remained active. To make these trainings nation-wide, the CBRT continued with its “Economics for All in Anatolia” project. Accordingly, events were held on 19‑22 February 2019 in Eskişehir, on 3 May 2019 in İzmit, and on 5‑6 November 2019 in Amasya.
• On a pre-scheduled basis, technical meetings and teleconferences were held with analysts, strategists, economists, and portfolio managers from Turkish and foreign investment institutions and credit rating agencies. A total of 57 meetings were held with 283 institutions and 418 people.
• With a view to reinforcing communication with the corporate sector and explaining the CBRT policies to the public in a more effective way, Governor Murat Uysal delivered a speech on “Economic Outlook and the CBRT’s Real Sector Studies” at the Assembly Meeting of Ankara Chamber of Industry, and a speech on “External Balance, Sustainable Growth and Price Stability” at the Assembly Meeting of Istanbul Chamber of Industry.
• To examine the structural constituents of the Turkish economy and closely monitor the corporate sector, first-hand information was obtained via face-to-face meetings with a total of 1,919 firms, of which 906 were from the manufacturing industry and 518 were from the wholesale and retail trade sector.
• The Food and Agricultural Product Markets Monitoring Committee (Food Committee), secretarial services of which are undertaken by the CBRT, continued to take decisions regarding the structural and cyclical actions. These actions continued to be designed with a focus on the price stability perspective through cooperation among institutions. Accordingly, the Food Committee convened seven times throughout the year.

MORE INTENSIVE AND EFFICIENT USE OF TECHNOLOGY

The CBRT continued to use technology and automation intensively and efficiently in all business processes.

• The microsite Economics for All, which includes videos, booklets, infographics and tests prepared to increase awareness of the Bank’s core functions and main economic concepts, was redesigned in June.
• The design and content plan of the Virtual Museum, which includes information on the Bank’s history, banknote printing processes, the series of old and new banknotes, and the CBRT’s art collection, were renewed in February. In December, its English version was launched.
• Work was carried out to conduct research and cooperation activities for steering the developments in the Financial Technologies (FinTech) sphere according to Turkey’s needs and strategy, to identify the needs of the sector by closely monitoring developments regarding payment systems, payment services and financial technologies, and to contribute to the formation of a robust ecosystem.
• Through joint work with the Republic of Turkey Ministry of Justice, the integration of loan and deposit rates into the National Judiciary Informatics System (UYAP) was completed. This project has enabled various banking data to be inquired via the UYAP platform, expediting access to data required in court case processes.
• Numerous data sets that would help in decision-making processes were included in the Big Data Platform and started to be used.
• To monitor the factors affecting FX market dynamics and FX positions of real and legal persons, high-frequency intraday data platforms were established.
• Software solutions for new instruments devised to address Turkish lira and foreign exchange markets, and software for new securities issuance models devised upon demands from the Republic of Turkey Ministry of Treasury and Finance were successfully developed and introduced in a timely manner.

COORDINATION WITH NATIONAL AND INTERNATIONAL SHAREHOLDERS

In the development and implementation of economic policies under its domain, the CBRT continued to work in coordination with national and international stakeholders.

• Various domestic national platforms were attended.
• International conferences and meetings were held, and activities for regional cooperation were given priority.
• Under the CBRT’s bilateral cooperation strategy, a total of 68 activities were held with 33 peer central banks in Turkey and abroad. Of these activities, 52 were working visits.
• Through a new memorandum of understanding signed, the number of central banks that the CBRT officially cooperated with reached 32. Thus, the scope of the CBRT’s international cooperation network was widened.
• In 2019, the Istanbul School of Central Banking (ISCB), for the first time, organized international training programs on risk management in Islamic banking and finance, stress testing in Islamic financial institutions, Islamic banking and finance for central banks, organizational transformation in central banks, and inclusive approach to financial risk management in central banks.
• Also for the first time, the ISCB offered financial sector courses on a national level to employees from banks and financial corporations operating in Turkey.

DEVELOPING CULTURAL, ARTISTIC AND SOCIAL SENSITIVITY

Acting with social responsibility and sensitivity, the CBRT continued to engage in cultural, artistic and sports activities.

• Exhibitions of prominent pieces from the CBRT Art Collection were held on 27 March‑30 July 2019 in Antalya, on 27 June‑30 September 2019 in Ankara, and on 18 November‑20 December 2019 in Amasya.
• The CBRT participated in social responsibility activities, and continued to contribute to academic studies through donations and aid.
• In the scope of internal communication activities, theatre tickets for some plays were reserved for employees, and trekking and a photography contest were organized to increase communication among employees as well as their motivation.
• The CBRT held tournaments on various fields of sports in Turkey and abroad while employees also participated in tournaments organized by other institutions.
• To develop a sense of corporate belonging, support arts and artists, and reinforce internal communication, a photography contest on the theme “Autumn-Winter” was organized among the CBRT employees on 22 November‑25 December 2019.
• The CBRT employees participated in the tree-planting event that took place simultaneously in 81 provinces on 11 November 2019 under the “Geleceğe Nefes” (“Breath for the Future”) campaign run all around Turkey. The employees planted more than 1,200 trees.