Türkiye Cumhuriyet Merkez Bankası

Türkiye Cumhuriyet Merkez Bankası, commonly abbreviated as TCMB or CBRT, is the central bank of the Republic of Türkiye. It is headquartered in Ankara and serves as the institution responsible for implementing monetary policy, issuing the country’s banknotes, managing official foreign-exchange and gold reserves, supporting the stability of the financial system, and operating or overseeing important payment and settlement infrastructure. Its legal framework gives it a high degree of formal instrument independence, although the bank operates within the broader economic policy environment established by the Turkish state. The institution was established in 1930 during the early Republican period and began operations in 1931. Its creation reflected the need for a national monetary authority after the Ottoman period and the transition to a sovereign Turkish financial system. The bank initially operated in an environment in which the lira, public finance, trade and banking were closely connected to state-building priorities. Over time, its responsibilities developed from currency administration and government-related banking functions into a modern central-bank mandate centered on price stability and financial stability. The bank’s core instruments include policy-rate decisions, liquidity facilities, reserve requirements, open-market operations, collateral arrangements and foreign-exchange interventions or related market operations. It publishes monetary-policy decisions, inflation reports, financial-stability assessments, balance-of-payments data, reserve information and other economic statistics. The Monetary Policy Committee is the principal body responsible for setting the policy rate and communicating the monetary-policy stance. The bank also acts as banker and financial agent for the state in specified areas, manages official reserves and has authority connected with banknote issuance and payment systems. Inflation control has been the central policy challenge in the modern history of the institution. Turkey has experienced repeated episodes of high inflation, exchange-rate pressure and external-financing stress. The CBRT’s policy choices have therefore attracted sustained attention from domestic households, banks, businesses, investors, rating agencies and international institutions. In the 2010s and early 2020s, the bank used a complex set of conventional and unconventional instruments, including changes to the one-week repo rate, corridor facilities, reserve requirements, targeted lending measures and macroprudential tools. This period also saw frequent public debate about the relationship between monetary-policy independence, presidential economic policy and the appointment and tenure of governors. Following the sharp lira depreciation and inflation acceleration of 2021–2023, the institution adopted a markedly tighter monetary stance from mid-2023. Policy-rate increases were accompanied by steps intended to simplify the monetary framework, strengthen transmission, rebuild reserves and reduce credit and demand pressures. The precise mix of instruments has continued to evolve as the bank has sought to bring inflation expectations and realized inflation back toward its medium-term target while limiting risks to financial stability. The CBRT is not a consumer-facing commercial bank and does not compete for ordinary retail deposits or sell conventional financial products. Its principal stakeholders are the Turkish state, regulated financial institutions, payment-system participants, markets and the public that uses the Turkish lira. The bank’s public identity is expressed through the TCMB name, its banknotes, official economic publications, policy communications and its role as the country’s monetary authority.

The Central Bank of the Republic of Türkiye was established in 1930 and commenced operations in 1931. Its formation was part of the institutional construction of the Turkish Republic and the effort to create a national monetary authority capable of issuing currency, managing monetary conditions and supporting the financial administration of the new state. Ankara became the bank’s headquarters. In its early decades, the institution operated in a heavily managed economic system. Its functions included banknote issuance, government banking, reserve management and the provision of credit or liquidity within the policy framework of the period. The bank’s role changed as Turkey moved toward a more diversified banking sector, greater integration with international trade and finance, and more market-based monetary management. The Turkish lira underwent several periods of inflation, exchange-rate instability and monetary reform. In 2005, six zeros were removed from the currency in the redenomination that introduced the New Turkish lira, which was later again referred to simply as the Turkish lira. Currency administration and banknote design remain among the bank’s most visible public functions. A major modern institutional shift occurred in the early 2000s. Following the 2001 financial crisis and a broad economic reform program, Turkey placed greater emphasis on central-bank independence and price stability. The Central Bank Law was amended to give price stability a primary objective and to reinforce the bank’s ability to determine and implement monetary policy. The bank subsequently adopted an explicit inflation-targeting framework, while also communicating through policy statements, inflation reports and Monetary Policy Committee decisions. During the global financial crisis and its aftermath, the CBRT developed a wider policy toolkit. It used interest-rate corridors, liquidity operations, reserve requirements and other instruments to address inflation, capital-flow volatility, credit growth and financial stability. The bank’s policy framework became more complex than a single policy-rate system, reflecting the pressures faced by an open emerging-market economy with significant foreign-currency exposure and external financing needs. From the late 2010s into the early 2020s, monetary policy became a major source of domestic and international controversy. Turkey experienced pronounced lira depreciation and high inflation, while the bank’s governors changed frequently relative to normal central-bank practice. Policy-rate decisions, reserve measures and government-backed financial programs were closely associated with debates about institutional independence and the appropriate response to inflation and exchange-rate pressure. In 2021, the bank sharply reduced its policy rate despite rising inflation, contributing to further market concern and currency weakness. In June 2023, the CBRT began a forceful tightening cycle under Governor Hafize Gaye Erkan. The process continued after Fatih Karahan became governor in February 2024. The bank raised the policy rate substantially, tightened liquidity conditions and introduced measures designed to simplify the framework, improve monetary transmission, moderate credit expansion and rebuild confidence in the lira. The policy challenge remained difficult because inflation was elevated, expectations were unsettled and the economy was balancing disinflation against growth and financial-stability risks. Today, the CBRT’s responsibilities include setting and communicating monetary policy, issuing Turkish lira banknotes, managing official foreign-exchange and gold reserves, conducting market operations, supporting payment and settlement systems, producing economic statistics and contributing to financial stability. It works with domestic banks, public authorities and international financial institutions, but it is not a commercial bank for the general public. Its institutional history is therefore closely tied to Turkey’s changing economic model, inflation experience, exchange-rate regime and relationship with global capital markets.

• 2024

  Fatih Karahan becomes governor

  [8]Fatih Karahan becomes governortcmb.gov.tr

  Fatih Karahan was appointed governor and continued the restrictive policy direction adopted in the previous year.

• 2023

  Major monetary tightening begins

  [7]Major monetary tightening beginstcmb.gov.tr

  The bank began a substantial rate-hiking cycle and announced a transition toward a simpler, more conventional monetary-policy framework.

• 2021

  Şahap Kavcıoğlu becomes governor

  [5]Central Bank of the Republic of Türkiye: Governorstcmb.gov.tr

  Şahap Kavcıoğlu succeeded Naci Ağbal as governor.

• 2020

  Naci Ağbal becomes governor

  [5]Central Bank of the Republic of Türkiye: Governorstcmb.gov.tr

  Naci Ağbal became governor during a period of heightened inflation and exchange-rate pressure.

• 2019

  Governor changes

  [5]Central Bank of the Republic of Türkiye: Governorstcmb.gov.tr

  Murat Uysal succeeded Murat Çetinkaya as governor.

• 2016

  Murat Çetinkaya becomes governor

  [5]Central Bank of the Republic of Türkiye: Governorstcmb.gov.tr

  Murat Çetinkaya took office as governor, beginning a period later marked by substantial policy and leadership changes.

• 2005

  New Turkish lira redenomination

  [4]Central Bank of the Republic of Türkiye: Banknotestcmb.gov.tr

  Turkey removed six zeros from the lira as part of a currency redenomination and monetary reform program.

• 2002

  Explicit inflation targeting introduced

  [6]Explicit inflation targeting introducedtcmb.gov.tr

  The bank moved toward an explicit inflation-targeting regime, later formalized as its principal monetary-policy framework.

• 2001

  Post-crisis reform period

  [1]Central Bank of the Republic of Türkiye: Historytcmb.gov.tr

  Following Turkey’s severe financial crisis, reforms strengthened the emphasis on price stability and formal central-bank autonomy.

• 1931

  Operations begin

  [1]Central Bank of the Republic of Türkiye: Historytcmb.gov.tr

  The bank began operating from Ankara, undertaking central-bank and currency-related functions for the Turkish Republic.

• 1930

  Central bank established

  [1]Central Bank of the Republic of Türkiye: Historytcmb.gov.tr

  The Central Bank of the Republic of Türkiye was established as the country’s national monetary authority.

Turkey’s sovereign monetary authority and financial-system institution, positioned around price stability, monetary transmission, currency issuance, reserve management and financial stability rather than commercial banking.

• Central-bank policy

  Monetary policy

  The CBRT sets and communicates monetary policy through its Monetary Policy Committee. Its toolkit includes the policy rate, liquidity facilities, open-market operations, reserve requirements and other instruments used to influence inflation, credit conditions, exchange-rate pressures and monetary transmission.

• Currency · 1931

  Turkish lira banknotes

  The bank has the exclusive authority to issue banknotes denominated in Turkish lira. Banknote series, denominations, security features and circulation arrangements are administered through the CBRT’s currency function.

• Reserve management · 1931

  Official reserves

  The CBRT manages Turkey’s official foreign-exchange and gold reserves. Reserve operations support external liquidity, the credibility of the currency framework and the functioning of foreign-exchange markets, subject to the bank’s legal mandate and policy choices.

• Payment systems

  Electronic Funds Transfer System

  The CBRT operates central payment and settlement infrastructure used by financial institutions for electronic transfers. These systems form part of Turkey’s critical financial infrastructure and help settle interbank and other eligible payments.

• Economic publication

  Inflation Report

  The Inflation Report explains the bank’s economic assessment, inflation outlook, assumptions, risks and policy framework. It is one of the CBRT’s principal instruments for public communication and accountability.

• 2024

  Continuation and simplification of the restrictive frameworkStrategy

  Background

  The bank continued to confront high inflation and unsettled expectations while seeking to make its policy framework more transparent and effective.

  Action taken

  Under Governor Fatih Karahan, the CBRT maintained a restrictive stance and continued measures aimed at strengthening monetary transmission and containing credit and demand pressures.

  Aftermath

  The policy direction remained centered on bringing inflation down over time while managing the effects of tight credit and exchange-rate adjustment on the wider economy.

  Source

• 2023

  Beginning of major monetary tighteningPrice change

  Background

  Inflation, lira depreciation and pressure on external balances required a policy response after a prolonged period of unconventional monetary conditions.

  Action taken

  The Monetary Policy Committee began raising the one-week repo rate and combined rate increases with liquidity, reserve and regulatory measures intended to improve policy transmission.

  Aftermath

  The bank entered a sustained restrictive-policy period focused on disinflation, rebuilding credibility and reducing excess domestic demand, while financial-market volatility remained significant.

  Source

• 2005

  Lira redenominationOther

  Background

  The Turkish lira had accumulated a large number of zeros after prolonged inflation, complicating pricing, accounting and cash transactions.

  Action taken

  Turkey removed six zeros and introduced the New Turkish lira as part of a currency reform program.

  Aftermath

  The redenomination simplified the unit of account and banknote denominations; the currency later reverted to common usage of the Turkish lira name.

  Source

• 2002

  Adoption of explicit inflation targetingStrategy

  Background

  The bank sought to anchor inflation expectations and establish a clearer framework after years of high inflation and economic instability.

  Action taken

  The CBRT moved toward an explicit inflation-targeting framework, using published targets, forecasts and policy communication as central elements of monetary management.

  Aftermath

  Inflation targeting became the principal framework for communicating the bank’s medium-term objective, although later periods also required additional macroprudential and liquidity tools.

  Source

1. 1Central Bank of the Republic of Türkiye: Historytcmb.gov.tr
2. 2Central Bank of the Republic of Türkiye: Main websitetcmb.gov.tr
3. 3Central Bank of the Republic of Türkiye: Monetary policytcmb.gov.tr
4. 4Central Bank of the Republic of Türkiye: Banknotestcmb.gov.tr
5. 5Central Bank of the Republic of Türkiye: Governorstcmb.gov.tr
6. 6Explicit inflation targeting introducedtcmb.gov.tr
7. 7Major monetary tightening beginstcmb.gov.tr
8. 8Fatih Karahan becomes governortcmb.gov.tr