2.12 Research and Development Activities

2.12.1 Academic Research and Development Activities

In line with the importance it attaches to academic studies, the CBRT published Working Papers and Economic Notes prepared by its staff on its website. Peer-reviewed CBRT Working Papers based on research carried out by the CBRT staff increased by nine. Moreover, with a view to making a timely contribution to discussions on economic developments and sharing the results of the studies on the Turkish economy and monetary policy, ten Research Notes in Economics were issued.

Moreover, various articles contributed by CBRT employees were published in journals listed in the Social Sciences Citation Index (SSCI).

2.12.2 Research Activities on Structural Economic Developments

In 2023, the CBRT continued to conduct analyses aimed at determining the structural developments in the Turkish economy, particularly structural factors limiting the effectiveness of monetary policy, carried out research and monitoring activities in the form of on-site observation of the effects of monetary policy on real sector activities, and produced policy recommendations in the framework of inter-institutional cooperation. This research and field observations were supported by current data and the results of the studies were communicated to stakeholders.

Activities related to structural economic developments can be grouped into four headings:

  • Research activities on the interaction of structural factors of the Turkish economy with the monetary policy,
  • Providing information on food and agricultural product prices and presenting research on pricing behavior on the platforms of the Food and Agricultural Product Markets Monitoring and Evaluation Committee (Food Committee) and the Price Stability Committee,
  • Coordination activities for research studies,
  • Activities in the scope of the Real Activity Lens (REAL).

In order to examine the structural developments in the Turkish economy and their interaction with monetary policy, various topics have been examined such as pricing behavior, market structure and competition, foreign trade, current account balance and firm dynamics, labor markets, productivity and household behavior by employing empirical and theoretical methods. The findings were regularly presented to policymakers during MPC procedures and at meetings held in collaboration with stakeholders.

The Food Committee focused on identifying and solving structural and cyclical problems in the agriculture and food sectors in line with the objective of ensuring stability in food prices and increasing predictability. Relevant ministries and organizations are represented at the highest level at Food Committee meetings and concrete policy measures are implemented in line with the decisions taken. In 2023, the Food Committee convened twice and took decisions on issues such as food price stability, supply security of agricultural products and agricultural planning.

In the framework of the Food-EWS (Food Early Warning System) project conducted by the CBRT as per the decisions of the Food Committee, the CBRT has analyzed data on food and agricultural products prices, which are of critical importance for price stability, in a detailed and timely manner and recommendations on measures have been made. The up-to-date database in this area is used to monitor structural problems and critical developments in food and agricultural product markets, and regular briefings and reports on the latest developments in the sector are presented at the Committee meetings. On the other hand, the Food and Agricultural Markets Report, the Food Foreign Trade Developments Report and the Inflation Developments in Critical Food Products Report prepared within the framework of the Food-EWS are regularly shared with relevant ministries and institutions.

In 2023, three articles prepared with the contributions of the Structural Economic Research Department were published in the Central Bank Review, two publications were included in the Working Papers series, and two studies were published as CBRT blog posts in the CBRT Blog. Three of these studies were presented to academics and policymakers at national and international seminars and conferences. Within the scope of the Financial Support for Academic Studies Program (FSASP), seven different applications for conference support were received, and all of them were provided with financial support. In 2023, 127 articles were submitted to the Central Bank Review, whose editorial and refereeing processes are carried out by the Bank, and 12 articles were accepted and published.

In 2023, the CBRT continued to incorporate real sector developments as a high-quality and timely source of information into its decision-making processes. In this regard, meetings were organized bringing together the CBRT and senior executives of firms and NGOs to serve as a platform to gather comprehensive information about the economic activity, and real sector sentiment has been monitored in a timely manner.

Information gathered in monthly meetings allowed a healthier evaluation of cyclical developments in economic activity (such as production, domestic and foreign sales, investment, employment, financing conditions, costs and prices). These visits aimed to exchange views on the effects of monetary policy practices on the real sector, and thus contribute to the CBRT’s communications policy. In Inflation Reports published in 2023, boxes bearing the title “Findings Obtained from Firm Interviews” were published and findings obtained from cyclical interviews were shared with the public.

In addition to the regular field meetings held to follow cyclical developments, thematic studies were carried out on the developments in the areas of interest of the MPC or on the issues specific to the period, and reports were prepared. Moreover, studies have been conducted on the structures of different sectors, general information on workflows and recent developments in these sectors. Accordingly, out of a total of 3,290 interviews conducted in 2023; 2,563 were in the scope of cyclical studies, 426 were in the scope of various thematic issues mostly about investments and 301 were agricultural interviews.

2.12.3 Research and Development Activities in Data Governance and Statistics

To monitor the CBRT’s data-driven policy decisions more effectively, high-frequency integrated databases were supported with new data. The impacts of policies implemented were regularly monitored and impact analyses were conducted. Within the framework of inter-institutional cooperation, protocols were signed with various public institutions and organizations to contribute to policy design. Process efficiency was significantly increased by automating operational processes carried out by the Data Governance and Statistics Department. New data and analytical tools enhanced the functionality of the big data platform, which plays an active role in the CBRT’s policymaking processes. Statistics produced for the first time were shared with the public. Highlights from the CBRT’s activities carried out in 2023 are as follows:

  • With the Regulation published in the Official Gazette No. 32363 dated 8 November 2023, the FX position reporting that firms are obliged to make to the CBRT regarding their FX assets and liabilities was simplified and the scope of the obligation was changed. The scope of firms’ FX position reporting, which had been carried out since 2018 in the scope of the Systemic Risk Data Monitoring System, was reorganized in order to increase the representation of firms in the national economy, and the existing reporting format was simplified to facilitate firms’ reporting processes.
  • To assess the quality of CBRT statistics and monitor user needs, a Statistics User Survey was conducted among subscribers to the CBRT’s Publications Subscription System, registered users of the Electronic Data Delivery System (EVDS), and CBRT employees.
  • Data on Environmental, Social and Governance (ESG) debt securities have been added to the Securities Statistics under two new tables.
  • The list of participants of the Survey of Market Participants, which is conducted by the CBRT to monitor the expectations of decision-makers and experts in the financial and real sectors regarding various macroeconomic variables, was updated to increase the representativeness of the survey. Only corporate participants have been included to ensure continuity of participation.
  • Up-to-date templates and descriptions of the reporting forms, constituting the source of Monetary and Financial Statistics, which are collected from the banks and financing companies were published on the CBRT’s website.
  • In order to enhance the compliance of the Weekly Money and Banking Statistics with international statistical reporting standards, the CBRT started to collect the Weekly Deposit/Participation Fund Monitoring Form from banks.
  • In order to increase the efficiency and effectiveness of research and development activities conducted at the CBRT, the CBRT signed protocols with the Social Security Institution, the Ministry of Trade, the Public Oversight Accounting and Auditing Standards Authority, the Small and Medium Enterprises Development Organization (KOSGEB), Eximbank and the Export Development Corporation and started to share data with them.
  • Machine learning techniques have been employed to detect anomalies and enhance the data quality of micro-database within the CBRT.
  • The use of big data analytics outside the field of finance has been explored, and the development of the banknote serial number tracking project has significantly enhanced process optimization.
  • The number of users of Virtual Data Rooms, which provide secure and high-performance access to analytical data, increased by 35%.
  • The subsystems of the big data platform have been transitioned to container-based virtualization technology to meet modern technological requirements.

2.12.4 Research and Development Activities on Banknote Printing

A number of research and development studies have been carried out to improve the banknote printing process.

Signatures on E9 series, version VII banknotes in denomination of TRY 200 have been changed.

Between 17-19 October 2023, the Banknote Printing Plant underwent an audit by the Turkish Standards Institution to verify compliance of the Banknote Printing Plant’s Quality Management System with the ISO 9001 Quality Standards, the Occupational Health and Safety Management System with ISO 45001 standards, and the Environmental Management System with ISO 14001 standards. As a result of the audit, the Banknote Printing Plant’s ISO 9001 Quality and ISO 45001 Occupational Health and Safety Management System documents and ISO 14001 Environmental Management System document were certified as remaining valid.

In 2023, the new Solution System, which reduces environmental impact, uses up-to-date technologies and operates with the ultrafiltration method, was put into operation at the Banknote Printing Plant.

2.12.5 Research and Development Activities on Information Technologies

In the field of Information Technologies (IT), establishment of technological solutions and systems in line with the Bank’s objectives continued in addition to efforts to ensure the security and continuity of these systems. Below are the most significant of many improvements carried out throughout the year:

  • The transformation in the CBRT’s technology and application architecture continued to respond to the CBRT’s needs more quickly, to increase the number of alternative platforms, to maintain high levels of continuity, and to monitor end-to-end services.
  • In order to enhance business continuity, the CBRT continued to improve the infrastructure necessary for IT systems and applications to operate in different data centers in addition to the existing data centers.
  • Studies were carried out to increase cybersecurity resilience and expand preventive controls.
  • Cybersecurity monitoring and response capabilities were enhanced.
  • Efforts were made towards compliance with the Information and Communication Security Guidelines published by the Digital Transformation Office of the Presidency of the Republic of Türkiye and inspections were performed. As a result of inspections conducted by an authorized and independent organization, the CBRT’s ISO 27001 Information Security Management System certificate was renewed.
  • As part of the infrastructure improvement efforts, the CBRT started to modernize its data centers, and a new data center was established in line with this goal.
  • Studies towards allowing more effective use of data in decision-making processes continued.
  • Applications required to enhance the digitalization of CBRT processes were prepared and renewed.
  • The communication infrastructures of the CBRT’s Internet and payment systems applications were updated.
  • Work was carried out on the IT infrastructure of the CBRT’s Istanbul Finance Center campus.
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