The Position of Interest Rate Corridor on Monetary Transmission Mechanism


Arikan C., Gorgun S., Yalcin Y.

MALIYE DERGISI, no.174, pp.1-25, 2018 (ESCI) identifier

  • Publication Type: Article / Article
  • Publication Date: 2018
  • Journal Name: MALIYE DERGISI
  • Journal Indexes: Emerging Sources Citation Index (ESCI), TR DİZİN (ULAKBİM)
  • Page Numbers: pp.1-25
  • Keywords: Aysmmetry, Interest Rate Corridor, VAR, Impulse Response
  • Gazi University Affiliated: Yes

Abstract

The Central Bank of Republic of Turkey's using interest rate corridor, has an asymmetric structure, as a political tool to ensure price and financial stability since 2010 June. This study aims to investigate the effect of interst rate corridor on Turkish for the period 2010-2016 using the Vector Autoregression (VAR) model. According to the results, mostly when a shock given to IRC lower band, reel exchange rate, inflation when a shock given to IRC upper band, money supply reacts statistically and economically significant. Besides, by expanding the band it's been observed that the volume of domestic credit may be reduced and inflation targeting achieved the desired results.