Türkiye

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 struggled to meet those targets on a consistent basis and in some years 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
2014-17	wide inflation targets repeatedly overshot, and expectations repeatedly above wide target band; IMF calls for monetary policy normalisation, i.e. move to supplying liquidity to banks at single policy rate within interest rate corridor, and positive real policy rate	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.

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