The Central Bank of the Republic of Türkiye (Türkiye Cumhuriyet Merkez Bankası, CBRT) is the country’s primary monetary authority. It is responsible for issuing currency, maintaining price stability, managing interest rates, and overseeing financial stability. Established in 1931, the CBRT plays a crucial role in shaping Türkiye’s economic trajectory, particularly in periods of high inflation and currency volatility.

^{A view from the CBRT headquarters in Ankara, Türkiye-AA}

Duties and Responsibilities

The duties and responsibilities of the Central Bank, as defined by Law No. 1211, cover five main areas:

Price Stability

The primary objective of the Central Bank is to achieve and maintain price stability. Price stability refers to an inflation rate low enough to be ignored in economic decisions. The Bank determines, at its own discretion, the monetary policy it will implement and the instruments it will use to achieve this objective. This grants the Bank instrument independence in conducting monetary policy.

Financial Stability

Ensuring financial stability is a complementary objective for the CBRT. The Bank is responsible for taking regulatory measures in money and foreign exchange markets to ensure stability in the financial system. It monitors risks in the financial sector and implements necessary precautions to maintain stability.

Exchange Rate Regime

The Central Bank determines the exchange rate regime in coordination with the government and is responsible for its design and implementation. Additionally, the Bank is responsible for managing Türkiye’s gold and foreign exchange reserves in line with national economic interests and overseeing foreign exchange transactions and liquidity management.

The Privilege of Printing and Issuing Banknotes

The Grand National Assembly of Türkiye has indefinitely delegated the authority to print and issue banknotes to the Central Bank. The CBRT is the sole issuer of the Turkish lira (TRY).

Payment Systems

The Central Bank is responsible for establishing and regulating payment and securities settlement systems to ensure: Fast and secure transactions in financial markets as well as the uninterrupted operation and oversight of existing and future payment systems. It also introduces necessary regulations to support the financial infrastructure.

Monetary Policy and Instruments

To fulfill its duties, the CBRT employs the following key monetary policy tools:

• Policy Interest Rate (One-Week Repo Rate) – The primary tool for influencing borrowing and inflation.

• Open Market Operations (OMO) – Buying and selling government securities to control liquidity.

• Reserve Requirements – Setting the minimum reserves that banks must hold to regulate money supply.

• Foreign Exchange Operations – Managing currency interventions to ensure exchange rate stability.

Legal Framework

The Central Bank operates under the following legal statutes:

• Law No. 1211 – Governing the CBRT’s structure and responsibilities.

• Turkish Lira Law – Regulating the issuance and protection of the national currency.

• Financial Stability Framework – Coordination with regulatory bodies such as the Banking Regulation and Supervision Agency (BDDK).