Durmus Yılmaz: Central bank achievements and opportunities in Turkey Speech by Mr Durmus Yılmaz, Governor of the Central Bank of the Republic of Turkey, to members of the press at the Central Bank of the Republic of Turkey, Ankara, 18 April 2006. *  *  *  Dear Press Members, I have been appointed Governor of the Central Bank, which was vacated by Former Governor Mr. Süreyya Serdengeçti due to his retirement after having completed his five-year term on 14 March 2006 at the end of the business hours, and which has been filled temporarily by Dr. Erdem Basçı as Acting Governor since then. I have worked in various positions of the Central Bank of the Republic of Turkey since 1980. As you have been closely following, many achievements have been made since then, especially in the last couple of years, that will always be remembered as the turning points in our economic history. Distinguished members of the press, As a result of the legal amendments made in 2001, the greatest achievement in the area of monetary policy has been the attainment of the “Central Bank Independence”. Accordingly; “The Bank shall, with the objective to achieve and maintain price stability, be authorized to utilize monetary policy instruments described in this Law and shall also be authorized to directly determine and implement other monetary policy instruments that it deems appropriate.” as expressed in the Law on the Central Bank. Such an authorization is called “instrument independence” in the modern economic literature.
We introduced this concept exactly three years ago. You are acquainted with the main elements: definition of price stability, inflation forecast as main indicator and target range for the three-month Libor rate as operational target. Overall, our experience with our monetary policy concept has been good. Recently, this experience was discussed at an internal conference. Since the new concept was adopted, we have widened the basis of our monetary policy decisions and further developed our analysis of indicators and models. The more extensive use of relevant information enabled us to react more swiftly and with more foresight than formerly to changes in the economic situation. Our monetary policy concept met with a positive public reception in Switzerland. The same applies to the financial markets and international organisations such as the IMF and the OECD. The concept has vastly improved transparency. By publishing studies on internal decision-making processes and the forecasting models used, we have made further relevant information accessible. The public is thus in a better position to understand the reasoning behind monetary policy decisions. 2  BIS Review 73/2002  So far, we have published our inflation forecasts regularly in June and December. We should like to take this a step further and will in future publish an updated inflation forecast after every quarterly assessment of the situation. This will further help to improve transparency. From 2003 onwards, we will also inform the public of our monetary policy by publishing new inflation forecasts in March and September.