The CBRT has been using the full-fledged inflation targeting framework since 2006 to reach its primary objective of price stability.
The Bank uses policy rates and other monetary policy instruments to meet inflation targets through controlling aggregate demand and inflation expectations. Inflation forecasts of the Bank are also important in inflation targeting as a tool for steering inflation expectations. Inflation forecasts of the CBRT are publicized through Inflation Reports published in January, April, July, and October.
The Monetary Policy Committee, consisting of seven members, meets monthly on pre-announced dates to make policy rate decisions. Monetary Policy Committee decisions are publicized on the day of the meeting at 2:00 p.m., and a summary of the issues discussed in the meeting are published within 5 working days.
The CBRT is also delegated to take measures for maintaining the stability of the financial system, in addition to the primary objective of price stability. To this end, the Bank, starting from late 2010, developed a new monetary policy framework by building on the inflation targeting framework in order to contain macro-financial risks due to global imbalances.
Within this new framework, the Bank started to address macro-financial risks as conditions permit, while still preserving price stability as the overriding objective. The Bank uses a combination of policy instruments to attain the instrument diversity that is needed to attain its multiple objectives. These policy instruments are the one-week repo auction interest rate (i.e. the policy rate), the interest rate corridor between the overnight lending and borrowing rates at the Interbank Money Market and the İstanbul Stock Exchange Repo-Reverse Repo Market.