- Oct 3, 2018
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The Central Bank of the Republic of Türkiye (Turkish: Türkiye Cumhuriyet Merkez Bankası), commonly referred to as the TCMB, is the central bank of Türkiye. The Bank was originally established on 11 June 1930, pursuant to the Law No. 1715, and commenced operations on 1 January 1932. Headquartered in Ankara, its core functions and legal foundation are enshrined in the Constitution of Türkiye (Article 87) and the Central Bank Law No. 1211, as amended.
The TCMB is entrusted by law with the primary objective of achieving and maintaining price stability within Türkiye. It is empowered to utilize, at its discretion, a broad array of monetary policy instruments in pursuit of this objective. Accordingly, the TCMB enjoys instrument independence, though the determination of its final goals is coordinated in alignment with the broader economic policies of the State. Since 2006, the TCMB has operated under an explicit inflation targeting regime, reinforcing its commitment to transparency and accountability in monetary policy.
The TCMB ownership structure is defined in Law No. 1211, which divides its capital into four classes of shares:
- Class A shares are allocated solely to the Turkish Ministry of Treasury and Finance.
- Class B shares are allocated to national banks operating in Türkiye.
- Class C shares are allocated to banks other than national banks and privileged corporations.
- Class D shares are allocated to Turkish commercial institutions and to real and legal persons of Turkish nationality.
In 2002, the TCMB embarked on a comprehensive modernization of its monetary policy framework by gradually adopting an inflation targeting strategy. During the preparatory period from 2002 to 2005, the Bank strengthened its technical and institutional infrastructure, developed sophisticated macroeconomic models, and expanded its statistical databases. The Research Department was restructured as the Research and Monetary Policy Department, while a Communications Department was established to enhance the Bank’s engagement with financial markets and the public. Beginning in 2005, the Monetary Policy Committee (MPC) commenced the practice of publicly announcing its meeting calendar annually to improve predictability and market expectations. This process culminated in the formal adoption of explicit inflation targeting in 2006.
Following significant disinflation achievements, the TCMB initiated a currency reform to underscore its determination in ensuring monetary stability and strengthening public confidence in the national currency. As part of this reform, six zeros were removed from the Turkish lira, and the New Turkish Lira (TRY) was introduced on 1 January 2005, comprising new banknotes and coins issued under modern security and design standards.
Today, the TCMB pursues its policy mandates with a highly qualified cadre of experts, modern institutional frameworks, and robust infrastructure, all while vigilantly monitoring domestic and global developments.
Duties and Powers
The primary objective of the Central Bank of the Republic of Türkiye is to achieve and maintain price stability. The TCMB determines, at its discretion, the monetary policy to be implemented and the instruments to be utilized to achieve this objective.The core duties of the Bank include:
- Conducting open market operations.
- Protecting the value of the Turkish lira and establishing the exchange rate policy.
- Setting reserve requirements and liquidity ratios for financial institutions.
- Managing the country’s foreign exchange reserves and gold reserves.
- Regulating the volume and circulation of the Turkish lira.
- Ensuring financial stability and overseeing financial markets.
- The exclusive right to issue banknotes in Türkiye.
- The authority to jointly determine the inflation target with the government and implement monetary policy.
- The right to extend advances to the Savings Deposit Insurance Fund (SDIF).
- The role of lender of last resort to the banking system.
- The prerogative to request information from financial institutions and supervise compliance.
It holds the exclusive right to issue Turkish lira banknotes and coins through the Banknote Printing Plant (Banknot Matbaası) and mints managed in coordination with the Turkish State Mint (Darphane ve Damga Matbaası Genel Müdürlüğü). The TCMB also issues commemorative coins and investment coins, which are distributed domestically and internationally.
Under Turkish law, profits of the TCMB, after legal reserves and allocations, are transferred to the Turkish Treasury.
Although the TCMB does not hold participatory stakes in Turkish businesses, it maintains regulatory authority and influence over key financial institutions and infrastructures such as:
- The Istanbul Stock Exchange (Borsa İstanbul) (oversight role).
- The Takasbank (Istanbul Clearing, Settlement and Custody Bank).
- The Central Securities Depository (MKK).
The TCMB also plays a role in shaping pension savings policies. Recognizing demographic trends and fiscal constraints, the Bank actively collaborates with relevant authorities to promote long-term private savings schemes. For instance, since 2004, the Individual Pension System (Bireysel Emeklilik Sistemi, BES) has been promoted extensively. The distinguishing feature of this program is state co-contributions, whereby participants receive supplementary contributions from the government to bolster their retirement savings, thereby facilitating capital accumulation for various long-term personal objectives such as home purchases, education, or supplementary retirement income.
As a credible and modern institution, the Central Bank of the Republic of Türkiye continues to discharge its mandate with professionalism, prudence, and foresight in a dynamic and evolving financial landscape.
BOARD OF GOVERNORS
The TCMB's decision-making body is the Board of Governors. According to current regulations, it comprises the Governor, the Vice Governor and three other Deputy Governors. As of September 2006, its membership is as follows:Hafize Gate Erkan Governor | 
Korkut Boratav Vice Governor | Ceyla Pazarbasioglu Deputy Governor | Dr. Fatih Karahan Deputy Governor | 
Bilsay Kuruç Deputy Governor |
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