A Glance at 2024

MONETARY POLICY AND DISINFLATION

The monetary policy stance is set to ensure the continuation of the disinflation process by keeping inflation on track with the targeted path.

In 2024, the CBRT kept implementing macroprudential policies to enhance the effectiveness of monetary transmission against the divergence in expectations of economic units and possible volatility. Accordingly, measures were introduced for deposits, loans, and liquidity management.

In order to support monetary tightening, in 2024, the CBRT continued to make quantitative tightening decisions to eliminate excess Turkish lira liquidity. While influencing the policy rate- the main policy instrumentmonetary and financial conditions, and expectations, these decisions also balanced the excess Turkish lira liquidity and helped enhance monetary policy effectiveness. Accompanied by monetary tightening, regulations to raise the share of Turkish lira deposits also strengthened the transmission mechanism and improved the funding composition of the banking system.

Economic activity remained robust in the first quarter of 2024 on the back of wage adjustments and brought-forward demand, while the impacts of monetary tightening on economic activity were particularly noticeable in the second and third quarters. Demand was strong in the last quarter of the year, driven by campaigns and upcoming wage revisions, yet the contribution of domestic demand to growth declined significantly throughout the year, with the positive contribution of net exports standing out.

The year-round slowdown in economic activity had a limited impact on labor market indicators, and the unemployment rate declined on an annual basis.

The disinflation process starting in June continued in the second half of the year, with annual inflation standing at 44.4% at end-2024. Domestic demand conditions, which followed a weakening trend throughout the year due to monetary tightening, reached levels supportive of disinflation in the second half. Credit utilization was up in the first half of the year but remained moderate in the remainder of the year amid macroprudential measures. Depreciation of the Turkish lira being more limited compared to the previous year eased the inflationary pressures through this channel.

PLAIN, EFFECTIVE AND BILATERAL COMMUNICATION

In line with its primary objective of achieving price stability, the CBRT continued to inform the public of the decisive steps taken to achieve a significant and sustained improvement in inflation in 2024 within the framework of a plain, transparent, and bilateral communication policy.

  • In 2024, the decisions of the Monetary Policy Committee, Inflation Reports, Financial Stability Reports, Monthly Price Developments, the Monetary Policy for 2025 text, actions related to monetary policy and macroprudential measures, and the statistics and analyses released by the CBRT were publicly announced through press releases and other communication channels and shared on social media accounts.
  • To enhance the effectiveness of monetary policy communication, four Inflation Report Briefings were held in 2024 as part of bilateral communication, during which questions from press members, economists, and analysts were addressed.
  • For the purpose of establishing a high level of coordination with all stakeholders to reduce the inflation trend and consolidate the disinflation process, Governor Fatih Karahan, Ph.D., attended various national and international meetings and visited professional associations and chambers to deliver presentations on macroeconomic outlook and the CBRT’s policies and strategies.
  • In keeping with the principle of accountability, Governor Fatih Karahan, Ph.D., delivered two presentations at the Grand National Assembly of Türkiye’s (GNAT) Plan and Budget Committee in June and October and answered questions from the Committee members.
  • The “CBRT Blog,” a corporate blog highlighting current economic developments and featuring blog posts on topics such as macroeconomics and central banking, was utilized extensively as a crucial tool for policy communication. Nineteen new analyses were added to the blog, concurrently contributing to the CBRT’s policies and strategies. The blog was enhanced to increase the readability of the blog contents and to allow readers to share them on various platforms.
  • The Research Agenda for the 2025- 2027 period, which covers issues on the economic impact of factors that interact with CBRT policies, such as digitalization, artificial intelligence, and climate change, along with traditional central banking topics, was shared with the public via a press release and communicated on the CBRT’s website and social media accounts for greater recognition.
  • As part of its social media strategy, the CBRT kept up active use of its official accounts, posting in clear and plain language with rich visual content. In addition to existing accounts, a new X account, TCMB Ekonomik Araştırmalar (@TCMB_Arastirma), was created to share announcements and content regarding the academic publications and research activities of its staff.
  • The “Economics for All” microsite, which strives to reach various segments of society in the areas of financial literacy and economics education, was updated with new content that would help better understand the CBRT’s policies and current economic developments.

MORE INTENSIVE AND EFFICIENT USE OF TECHNOLOGY AND FINANCIAL INFRASTRUCTURE

  • The CBRT continued to work on the Instant and Continuous Transfer of Funds (FAST) System, a new generation 24/7/365 instant payment system operated by the CBRT, to increase competition and innovation in payments and provide new and value-added services. The System currently has 42 participants, including 29 banks, 12 payment and electronic money institutions, and the Turkish Postal and Telegraph Corporation (PTT). Considering the widespread use of the FAST System and the requirements of the payments ecosystem, the FAST transaction amount limit for money transfers was increased to TRY 100 thousand and to TRY 250 thousand for merchant payments using FAST-TR QR Code on April 4, 2024. The FAST transaction amount limit is being gradually raised, taking the needs of the public into account. On the other hand, overlay service projects continued in 2024, and work was carried out to expand the use of KOLAS (the Easy Addressing System), TR QR Code, and SIPER (Security Overlay Service). The Request-to-Pay and Escrow Overlay Service was put into use. In addition, “Terms of Use for the FAST Logo and Brand” and “FAST System User Interface and Experience Guide” documents were created to standardize the experiences of customers making money transfers and payments through the FAST System and Overlay Services, ensure that all payment service users receive the same quality of service, and boost the recognition and popularity of these services through branding, and all participants were required to abide by these documents.
  • Seven new Decentralized Cash Management (MONY) depots, four in Istanbul and one each in Izmir, Bursa, and Adana, were put into operation as part of the MONY project, which was launched to ensure uninterrupted circulation of the Turkish lira and execution of banknote custody and processing activities on behalf of the CBRT.
  • The hardware and software modernization of 60 banknote processing systems utilized in our branches was completed through investment in technology.
  • As part of our efforts to expand banknote processing capacity, two new systems were installed at the Gaziantep Branch, one at the Malatya Branch, and the processing capacities of one system each at the Kayseri and Denizli Branches were increased.
  • To improve cash operations, the CBRT completed the procurement of 12 new armored vehicles for use in banknote transportation.
  • A Consignment Coin Depot (CCD) began operations in Denizli province as part of the CCD practice, which was established to expand the service network offered to citizens by having coin transactions carried out by PTT on behalf of our Bank in order to regulate the volume and circulation of Turkish lira banknotes and coins.

COORDINATION WITH NATIONAL AND INTERNATIONAL STAKEHOLDERS

In 2024, the CBRT continued to carry out activities under its mandate and authority to strengthen cooperation with national and international stakeholders and deepen existing relations. It actively engaged in meetings and events organized both in person and online and organized meetings participated by the senior management, thus interacting and effectively communicating with both bilateral and multilateral stakeholders.

  • The CBRT held 86 investor meetings involving domestic and foreign institutional investors, economists, analysts, and portfolio managers, and communicated with 812 institutions to ensure timely, accurate, and effective communication of monetary policies. In coordination with the Ministry of Treasury and Finance, eight meetings were held with credit rating agencies (CRAs) throughout the year.
  • The CBRT continued to take part in work related to international meetings organized by the G20, the International Monetary Fund (IMF), and the Bank for International Settlements (BIS). The CBRT coordinated with domestic and international stakeholders and duly participated in such meetings.
  • The IMF delegation visited Türkiye between May 29 and June 11, 2024, in line with its mandate to monitor the economic and financial policies of member states and safeguard the international monetary system. In the scope of this visit, the CBRT delegation participated in Article IV meetings.
  • The CBRT and the Ministry of Treasury and Finance hosted the IMF - World Bank Constituencies’ Meeting at Deputies Level in Istanbul on July 11-13, 2024.
  • The CBRT hosted the sixth meeting of the Organization of Islamic Cooperation (OIC) - Standing Committee for Economic and Commercial Cooperation (COMCEC) Central Banks Forum, of which it acts as the secretariat, in Istanbul on September 29-30, 2024.
  • The conference on “Financial Inclusion in a Digital Age,” jointly organized by the CBRT and the World Bank Group, was held in Istanbul on October 2, 2024.
  • A Memorandum of Understanding on the establishment of the Council of Central (National) Banks of the Member States of the Organization of Turkic States (OTS) was signed in Bishkek, the capital of Kyrgyzstan, on November 6, 2024.
  • Efforts to develop and diversify bilateral relations with other central banks continued steadily in 2024.
  • Accordingly, the CBRT held 41 videoconferences and 12 working visits with 29 central banks. The CBRT leveraged the expertise and experience of stakeholder central banks through 4 written requests for information to contribute to CBRT projects and capacity building and contributed to bilateral cooperation by responding to 17 similar requests for information. Technical cooperation activities were supported by high-level bilateral meetings with officials from stakeholder central banks and representatives of diplomatic missions.
  • The existing dialogue with partners with whom the CBRT already had a solid foundation for cooperation was expanded to include more central banks. Accordingly, the Bank signed memorandums of understanding with the Banco de España, Banco Central do Brasil, National Bank of the Republic of Kazakhstan, Saudi Central Bank, and Central Bank of Oman and renewed bilateral currency swap agreements with the Bank of Korea and Qatar Central Bank.
  • As part of Türkiye’s accession to the European Union (EU), the CBRT made the necessary contribution on the issues that fall under its remit. The Bank also actively participated in the Economic and Financial Dialogue meetings, and meetings of Economic Forecasts for Candidate Countries, as well as the meeting of Subcommittee No. 4 on Economic and Monetary Issues, Movement of Capital, and Statistics.
  • The CBRT took part in the work of the Network for Greening the Financial System (NGFS), which is a collaboration platform for the management of financial sector’s environment and climate-related risks. The CBRT took an active role in writing the NGFS reports on climate change and central banking. The CBRT also contributed to the G20 Sustainable Finance Working Group.
  • The CBRT supported the work carried out by public institutions, most notably the Presidency of the Republic of Türkiye and the Ministry of Treasury and Finance, on issues that fall under its remit, and maintained its cooperation and coordination activities and attended relevant meetings.
  • In 2024, the CBRT attended the Food and Agricultural Product Markets Monitoring and Evaluation Committee (Food Committee) and Subcommittee meetings, provided information on food and agricultural product prices, presented research on pricing behavior, and took part in working groups established under the Food Committee.

SOCIAL SENSITIVITY

While fulfilling its main duties and responsibilities, the CBRT continued to contribute to academic studies as part of its corporate social responsibility activities.

  • The CBRT continued to award scholarships to the graduates of Derince Anatolian High School. A graduation ceremony was held where successful students received awards.

INCREASING THE EFFECTIVENESS OF THE PAYMENTS AREA

  • The Data Sharing Services in the Field of Payments (DSSP) GEÇİT (Gateway) Infrastructure continued to be expanded. There are currently 25 Account Servicing Payment Service Providers (ASPSPs) and 27 Authorized Third Party Payment Service Providers (TPPs).
  • A survey was conducted with the participation of 82 payment and electronic money institutions subject to the CBRT’s regulation and supervision in order to provide insight into the information systems structure and procedures of the sector and to offer guidance for upcoming regulatory and supervisory activities.
  • Communiqués issued as per Law No. 6493 on Payment and Securities Settlement Systems, Payment Services, and Electronic Money Institutions were communicated to payment and electronic money institutions, and existing regulations were revised.
  • Following the oversight and supervision activities carried out at institutions, 55 institutions were charged with administrative fines totaling TRY 160.3 million, and 16 institutions received warnings under Article 27 of Law No. 6493 titled “Violation of regulations and decisions.”.
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