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The Interest Rate Corridor as a Macroprudential Tool to Mitigate Rapid Growth in Credits: Evidence from Turkey

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  • Umit BULUT

    (Ahi Evran University, Kirsehir, Turkey)

Abstract

The Central Bank of the Republic of Turkey (CBRT) has utilized the interest rate corridor as a macroprudential tool to mitigate rapid credit growth in Turkey since October 2011. This paper examines whether the interest rate corridor can be used as a macroprudential tool to affect credits in Turkey. According to the findings of the paper, the uncertainty about the funding amount and the funding cost created by the CBRT through the interest rate corridor has statistically significant impacts on credits. Eventually, upon its findings, the paper asserts that the interest rate corridor can be utilized as a macroprudential tool to affects credits and aggregate demand in Turkey.

Suggested Citation

  • Umit BULUT, 2015. "The Interest Rate Corridor as a Macroprudential Tool to Mitigate Rapid Growth in Credits: Evidence from Turkey," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(4(605), W), pages 133-144, Winter.
    • Handle: RePEc:agr:journl:v:xxii:y:2015:i:4(605):p:133-144
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    2. Umit Bulut, 2016. "Do Financial Conditions have a Predictive Power on Inflation in Turkey?," International Journal of Economics and Financial Issues, Econjournals, vol. 6(2), pages 621-628.
    3. Igoni Pedro & Ganiyat Adejoke Adesina-Uthman, 2022. "Impact of Monetary Policy Shocks on the Output Gap in Nigeria," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 14(9), pages 1-38, September.

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