Türkiye had a long period of incoherent policy, with some improvements in its monetary instruments in the 1990s, then moved to inflation targets from 2002, but it struggled (or declined) to meet those targets on a consistent basis and in 2006-8 and again from 2014 its framework has to be reclassified as loosely structured discretion.
| Years | Targets and attainment | Classification |
| 1974-88 | exchange rate adjusted frequently (more fixed than targeted); monetary policy operated mainly through direct instruments; strong element of fiscal dominance; 1986-88 monetary targets repeatedly missed; lack of clarity over objectives, with repeated returns to expansion before inflation fully controlled | unstructured discretion UD |
| 1989-2002 | exchange rate more market-determined; central bank now operating more through indirect instruments; but objectives not coherent, recurring fiscal dominance; exchange rate crises 2000-01 lead to stabilisation and reform including move to inflation targeting 2002, but first target well undershot | loosely structured discretion LSD |
| 2003-5 | wide informal/implicit inflation targets (+/-2% band) hit | loose converging inflation targeting LCIT |
| 2006-8 | wide formal inflation targets overshot, no evidence of expectations remaining anchored | loosely structured discretion LSD |
| 2009-13 | wide inflation targets met except for 2011, when expectations remain partly within band | loose inflation targeting LIT |
| 2014-23 | wide inflation targets repeatedly overshot, expectations repeatedly above wide target band; IMF presses for monetary policy normalisation, i.e. move to supplying liquidity to banks at single policy rate within interest rate corridor, together with positive real policy rate, and later for clear FX intervention policy; from 2019 repeated central bank management changes, interest rate cuts, lira depreciations, and late 2021 scheme to protect lira term deposits against (in order to limit) depreciation, while inflation continues to rise; major effect of Covid-19, with strong policy response, mainly monetary, which supports growth but worsens pre-existing imbalances; shift to more orthodox policies late 2020 turns out to be short-lived; after May 2023 elections policy shifts back towards stabilisation by conventional means | loosely structured discretion LSD |
Selected IMF references: RED 1985 section III.1; RED 1990 pp1-2, 22-23, 31; SR 2004 pp4, 26, 40; SR 2013 pp11-12; SI 2014 pp11-18; SR 2014 pp16-19; SR 2016 pp7, 19-20; SR 2018 p31; SR 2019 pp5-6, 12-14; SR 2021 pp5-14, 18-20, 46; SR 2022 pp5-13, 18-20, 32, 40, 43; IMF Staff Concludes Staff Visit to Türkiye October 6, 2023 (press release).
Other references: Central Bank of Republic of Turkey, Inflation Report, February 2024 pp35, 76, 79.
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Monetary Policy Frameworks 