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 14. 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, 17 Research Notes in Economics were issued.

Moreover, several articles co-authored by CBRT employees were published in journals listed in the Social Sciences Citation Index (SSCI).

2.12.2 Research and Development Activities on Structural Economic Developments

In 2024, the CBRT continued to conduct research and monitoring activities designed to analyze structural developments in the Turkish economy and identify structural factors limiting the effectiveness of monetary policy, to make on-site observations on the effects of monetary policy on real sector activities, and to develop policy recommendations based on inter-agency cooperation.

These activities can be grouped under the following key headlines:

Analyzing structural economic factors shaping the Turkish economy, conducting joint studies with related institutions and agencies to detect and address structural factors pertaining to price stability,
Real-time monitoring and analyzing economic developments in the scope of the Real Activity Lens (RESIM) on a regional and sectoral basis and producing reports to contribute to the monetary policy process,
Providing information on food and agricultural products prices and presenting research on pricing behavior at the Food and Agricultural Product Markets Monitoring and Evaluation Committee (the Food Committee) and the Price Stability Committee,
Conducting studies for internal credit rating of the corporate sector, monitoring its riskiness using high-frequency data and writing reports regularly,
Contributing to the planning of the Bank’s research agenda and increasing the institutional research capacity in the framework of the research agenda.

In this context, research and field observations were supported by up-to-date data, and the results of the studies have been shared with senior management.

In order to analyze structural developments and their interaction with monetary policy, empirical and theoretical methods were applied to study various topics such as pricing behavior, firm dynamics, labor markets, foreign trade developments, financial markets, competition, productivity and household behavior. The findings have been regularly presented to policymakers during MPC processes and at meetings with stakeholder institutions.

In 2024, two articles prepared with the contributions of the Structural Economic Research Department were included in the Working Papers series, while five research notes on economics and seven other studies were published as CBRT blog posts on 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), financial support was provided for 12 academic conferences at the end of the evaluation process. In 2024, 131 articles were submitted to the Central Bank Review, whose editorial and refereeing processes are carried out by the Bank, and 16 articles were accepted and published. Meanwhile, several articles prepared with the contributions of the Bank employees were published in journals listed in the Social Sciences Citation Index.

The CBRT continued to analyze real sector developments as a high-quality and timely source of information for the monetary policy decision-making process in 2024. In this regard, interviews were conducted with senior executives of firms in different sectors and representatives of NGOs to gather comprehensive information about economic activity, and real sector sentiment has been monitored in a timely manner.

Information collected 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 interviews served to exchange views with real sector representatives on the monetary policy framework and thus contributed to the CBRT’s communications policy. In Inflation Reports published in 2024, boxes bearing the title “Findings from Interviews with Firms” were published and findings obtained from periodical interviews were shared with the public.

In addition to the regular field meetings organized 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 were conducted on the structures of different sectors, general information on workflows and recent developments in these sectors. Accordingly, out of a total of 2,884 interviews conducted in 2024, 2,539 were in the scope of cyclical studies, 54 were in the scope of various thematic issues and 291 were agricultural interviews.

In September 2024, with an amendment to the CBRT’s Regulation on Organization, the “Rating and Risk Analysis Division” was incorporated under the Structural Economic Research Department, and the new Directorate carried out the following tasks:

Participated in and contributed to online meetings with the WGRA working group of the European Committee of Central Balance-Sheet Data Offices (ECCBSO) of the European Central Banks, of which the CBRT is a member, in order to enhance cooperation and improve rating analyses.
Contributed to monetary policy decision-making processes by providing high-frequency and micro-data analyses.
Regularly reported corporate sector firms’ riskiness and developments in the FX-protected deposit accounts (KKM) to senior management.
Developed an Environmental, Social and Governance (ESG) scoring methodology for corporate sector firms as part of the development of rating studies.
Conducted model development and impact analysis studies for policies and incentives in the scope of cooperation with public institutions, and the results were presented to the Bank and senior managers of relevant institutions.
Developed an exporter score model prioritizing value-added and high-tech exports for rediscount credits.
Organized training seminars in collaboration with the General Directorate of Human Resources on business intelligence, effective and efficient big data analysis and automation to increase the technical and analytical capacity of the Bank’s employees.
Organized an international workshop on “Addressing Climate Change Data Needs: The Global Debate and Central Banks’ Contribution” in Izmir on May 6-7, 2024 with the collaboration of the CBRT-IFC (BIS) and the contributions of the Bundesbank and the Bank of France. The workshop was attended by a significant number of national and international participants, and the presentations and discussions made a meaningful contribution to the ongoing global debate by focusing on physical and transition risk indicators.
At the Spring Meeting of the World Bank’s International Committee on Credit Reporting (ICCR) held in Brazil between 19- 21 June, 2024, the CBRT’s representative was elected as the Chair of the ESG Working Committee. This working committee made a significant progress in the preparation of the “ESG Global Guidelines for Credit Reporting”.

2.12.3 Research and Development Activities in Data Governance and Statistics

The stock balances of FX-protected deposit/participation accounts converted from FX-/gold and FX-protected Turkish lira deposit/participation accounts started to be published as time series in a monthly frequency, under Monthly Money and Banking Statistics.
The Commercial Property Price Index, which was developed to monitor price developments in the commercial property market, started to be published.
Sectoral Inflation Expectations started to be published in order to allow monitoring of the 12-month-ahead consumer inflation expectations of market participants, the real sector and households comparatively.
Data on electronic money institutions started to be included in the money supply in line with international standards.
The scope of the “Shares and Debt Securities Held by Non-Residents, which is issued as part of Securities Statistics, was expanded to include debt securities issued by residents abroad.
The content and presentation of the Financial Accounts Report was renewed.
The calculation method of the House Price Index was revised and the quarterly data set was replaced by the monthly data set in order to increase timeliness. Thus, the publication period, which was t+45, became t+15.
The sampling and weighting methodology of the Bank Loans Tendency Survey was revised, and banks’ asset size was incorporated into the sample selection process in order to improve the representativeness of the survey.
The “Directive on the CBRT Data Research Centers” was prepared. The directive sets out the principles and procedures for using the CBRT’s data in scientific research and academic studies to be conducted by legally authorized entities.

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 denominations of TRY 50 and TRY 5, and version VIII banknotes in denominations of TRY 200 and TRY 50 have been changed.

Between 22 and 25 October, 2024, 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 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 Management System and ISO 45001 Occupational Health and Safety Management System documents were renewed, and ISO 14001 Environmental Management System document was certified as valid.

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:

In order to ensure 24/7 operability, the EFT (Electronic Fund Transfer System), RPS (Retail Payment System) and EMKT (Electronic Securities Transfer System) were redeveloped and redeployed to make them more independent and resilient with up-to-date technology.
The communication infrastructure of the payment systems was transformed into a more flexible architecture with redundancy.
An “Artificial Intelligence Room” was opened where employees can freely and securely use artificial intelligence solutions, and productive artificial intelligence-based assistants were introduced.
IT infrastructure was established at the Istanbul Financial Center campus.
The Electronic Data Delivery System (EDDS) was redeveloped in-house to enhance the user experience and enrich the system’s functionality.
IT architectural transformation work was largely completed in order to increase operational resilience and to address needs more quickly.
In order to support data-driven decision-making processes, the Bank switched to more advanced business intelligence platforms for data analysis, reporting and visualization, enriched the content of its data dictionary and inventory, and created an ecosystem where new needs can be easily integrated.
The data center network infrastructure was updated with innovative technologies.
The Document Management System was upgraded with many additional features.
The CBRT ISO 27001 Information Security Management System was upgraded to the latest version and the system was inspected and certified by an independent authority.

2.12.6 Research and Development Activities in the Field of Payments

Work has been carried out on the transformation of the digital Turkish lira into other forms of the Turkish lira, digital currency accounting and balance sheet presentation, promotion of digital currency and strategies for the use of distributed ledger technologies.

In the context of central bank digital currencies and blockchain structures, the CBRT carried out research, development and testing activities on cross-border payments, interoperability platforms, blockchain designs in the green economy, alternative digital identity integration solutions, programmable payments, token-based systems, offline payments, cryptology, the Internet of Things and simulation for the impact analysis of digital money.

Within the scope of financial technologies, artificial intelligence and machine learning studies suitable for central bank usage scenarios were examined, and research and experiments were conducted to detect suspicious payment transactions with artificial intelligence techniques.