Abstract:

Price stability means that the overall price level remains stable over time or rises at a low rate. When price stability is defined as the final goal of the monetary policy, it becomes important which approach to this goal is to be used. The main objective in Turkey is to ensure price stability and the Central Bank is to implement different methods and tools in different periods to this objective. However, there was no permanent recovery in the inflation. While the existing policies such as currency and currency currency targeting are questioned due to its failure in ensuring price stability, it has required the implementation of the inflation targeting regime, a new strategy that will reduce the impact of external shocks. Although this regime is considered more advantageous than its alternatives, it does not seem possible to say that it is perfect when taking into account the disadvantaged aspects. Turkey has tried monetary and exchange currency targeting in the past periods, but has not succeeded; after 2002 it has covered, and after 2006 it has implemented open inflation targeting.

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