After the First World War, the influence of the tendency for countries to independently determine their own monetary policies and efforts to establish a central bank accelerated in order to strengthen the political independence gained with the War of Independence with economic independence.
At the 1923 Izmir Economic Congress, where this issue was discussed for the first time, the idea of establishing a "national state bank" was particularly emphasized.
In 1927, the draft law submitted by the then Minister of Finance Abdülhalik Renda on the establishment of a central bank was accepted. During the establishment of the Central Bank, opinions were also sought from the central banks of other countries. In 1928, the then President of the Dutch Central Bank, Dr. Gerard Vissering was invited to Türkiye in this context.
Dr. Vissering completed his work in Istanbul and prepared the report titled "Cash Stability and the Establishment of a Central Issuance Bank in Türkiye".
The report drew attention to the necessity of an independent central bank that is not affiliated with the government. Italian expert Count Volpi, who was invited to Türkiye a year later, also stated that the establishment of a central bank was essential to ensure the stability of the Turkish lira.
Following these developments, the government took action to prepare the necessary legal framework for the establishment of a central bank. Prof. from the University of Lausanne. The Central Bank bill was prepared with the contributions of Leon Morf.
The bill was accepted by the Grand National Assembly of Türkiye (TBMM) on 11 June 1930 and published in the Official Gazette on 30 June 1930 under the name of the Central Bank of the Republic of Turkey Law No. 1715.
The Central Bank, which started its activities on October 3, 1931, after the functions carried out by different institutions and organizations were consolidated, is celebrating its 95th anniversary.
Banknote printing house was established
In the 1940s, when the negative effects of the Second World War were felt, the Central Bank in Türkiye, as in the rest of the world, took measures to close the financing gap of the public sector.
The financing of growth and rapid development in the 1950s was provided by the resources of the Central Bank. The Bank's resources were made available to the public by providing short-term advances to the Treasury. Another important development for the Central Bank during this period was the establishment of a banknote printing house in 1955, and banknotes began to be printed in the country as of 1958.
In the 1960s, when the transition to a planned economy took place, the Central Bank followed expansionary monetary policies in parallel with the economic conditions and the development of the industry and continued to provide resources to the public. During this period, the majority of practices regarding exchange control were transferred to the Central Bank.
Law No. 1211
In order to adapt to the changes that occurred worldwide after the Second World War and to increase the effectiveness of the Central Bank, the CBRT Law No. 1211 was adopted on January 14, 1970.
Thus, the Central Bank, which started a new era in its history, gained a structure that, at least partially, reflected the innovations of the period in the field of economy and central banking.
The law in question brought significant changes to the Bank's legal status, organizational structure, powers and duties. The capital of the Central Bank, whose joint stock company status was preserved, was increased from 15 million lira to 25 million lira. It was also included in the law that the capital share owned by the Treasury cannot be less than 51 percent.
Another innovation brought by Law No. 1211 was the Office of the President called "Governorship". Naim Talu was the first to be appointed to the Presidency, which was established to ensure parity in foreign representation and relations and equality in the protocol.
In addition to the governor's office, a new decision-making body was created called the "Management Committee", consisting of the President and Vice Presidents. The 8-member Board of Directors, which is the highest decision-making body of the bank, was transformed into the 6-member Bank Council.
The relevant law also included important innovations in terms of increasing the duties and powers of the Central Bank. The upper limit of the short-term advance amount that can be given to the Treasury has been increased by 15 percent of the budget appropriations for the relevant year.
Post-1980 period
The economic developments in the 1980s were a turning point for both Türkiye and the Central Bank. With the decisions announced on January 24, 1980, a structural transformation was initiated in the Turkish economy.
With the financial liberalization process initiated, important steps were taken to provide the necessary infrastructure for the CBRT to carry out monetary and exchange rate policies in harmony with the market economy. Within the scope of monetary policy, it was stipulated that deposit and loan interest rates should be determined under market conditions.
Turkish currency was devalued against foreign currencies and the fixed exchange rate regime was abolished. The CBRT was authorized to effectively manage gold and foreign exchange reserves in 1983. The Bank, which started conducting open market operations in 1987, also pioneered the establishment of modern money and foreign exchange markets.
In 1989, with the decision numbered 32 on the Protection of the Value of the Turkish Currency, economic units were allowed to conduct transactions in foreign currency and the Turkish lira was declared convertible and a relatively more flexible exchange rate regime was introduced.
In 1990, with the monetary program it announced to the public for the first time, the Bank aimed to meet the liquidity needs of the market without disrupting the stability of exchange rates and interest rates.
On April 21, 1994, limits were imposed on the Treasury's use of Central Bank resources. In addition, with a protocol signed in 1997, it was decided that the Treasury would not be able to use short-term advances from the CBRT as of 1998.
The bank achieved vehicle independence in 2001
The policy followed by the Central Bank in 1995-1999 was aimed at ensuring stability in financial markets. Due to the failure to control inflation, a new stabilization program based on the exchange rate was put into effect in 2000. However, the increasing loss of confidence towards the end of the same year and the crisis that emerged in 2001 led to the termination of the program. On February 22, 2001, exchange rates were allowed to float.
Following the structural transformation in the economy on April 25, 2001, following the crisis, significant changes were made to the Central Bank Law.
Ensuring price stability was clearly defined as the main objective of the CBRT. In this context, it was stipulated that the CBRT would directly determine its own monetary policy practices and the tools it would use. Thus, the Bank achieved instrument independence. It was stipulated that the Bank will support the government's growth and employment policies, provided that they do not conflict with the Bank's aim of ensuring price stability.
Ensuring financial stability was identified as the Bank's supporting objective. In this context, the Bank was prohibited from giving advances to the Treasury and other public institutions and organizations, extending loans and purchasing debt instruments issued by these institutions from the primary market. In this way, the Bank was prevented from becoming a source of public financing needs.
The Monetary Policy Board (MPC) was also established during this period in order to institutionalize monetary policy strategies and decision-making mechanisms.
6 zeros were removed from the money
By 2002, the inflation targeting regime, a modern monetary policy strategy, was implemented. In 2002-2005, when implicit inflation targeting was implemented, efforts were made to meet the necessary preconditions of the regime.
The technical and institutional infrastructure of the Central Bank was strengthened, forecast models were developed and the data set was expanded. In this process, the General Directorate of Research was restructured as the General Directorate of Research and Monetary Policy, and the General Directorate of Communications was established to ensure the effectiveness of communication policies.
Starting from 2005, annual MPC meeting dates were announced in advance within the framework of a calendar in order to increase predictability regarding policy decisions. At the end of this entire process, the explicit inflation targeting regime began to be implemented in 2006.
On January 1, 2005, 6 zeros were removed from the Turkish lira, and the New Turkish Lira and new kuruş were put into circulation. On January 1, 2009, the word "new" was removed from the currency. Turkish lira banknotes and kuruş were put into circulation with renewed designs and sizes.
In accordance with the Central Bank Law No. 1211, the Central Bank shares are divided into 4 classes: (A), (B), (C) and (D). Class (A) shares are allocated exclusively to the Treasury, class (B) shares are allocated to national banks operating in Türkiye, class (C) shares are allocated to other banks and privileged companies other than national banks, not exceeding 15 thousand shares, and class (D) shares are allocated to Turkish commercial institutions and legal and real persons with Turkish citizenship. was done.
Currently, the Bank's capital is 25 thousand liras divided into 250 thousand shares. As of the end of last year, 55.12 percent of the Central Bank's capital consists of (A) class shares, 23.25 percent of (B) class shares, 2.51 percent of (C) class shares and 19.12 percent of (D) class shares.
The Bank continues its efforts to ensure and maintain price stability with its qualified human resources, deep-rooted corporate culture and strong technical capacity.
Presidents since foundation
Since its establishment, 27 people have served as CBRT President.
Selahattin Çam, the first president, held this position between 1931-1938. The names who became Central Bank Governors after Çam are as follows:
"Kemal Zaim Sunel (1938-1949), Mehmet Sadi Bekter (1949-1950), Osman Nuri Göver (1951-1953), Mustafa Nail Gidel (1953-1960), Memduh Aytür (1960), İbrahim Münir Mostar (1960-1962), Ziyaettin Kayla (1963-1966), Naim Talu (1967-1971), Memduh Güpgüpoğlu (1972-1975), Cafer Tayyar Sadıklar (1976-1978), Hakkı Aydınoğlu (1979-1981), Osman Şıklar (1981-1984), Yavuz Canevi (1984-1986), Rüşdü Saracoğlu (1987-1993), Dr. Bülent Gültekin (1993-1994), Gazi Erçel (1996-2001), Süreyya Serdengeçti (2001-2006), Assoc. Prof. Erdem Başçı (2011-2016). Çetinkaya (2016-2019), Murat Uysal (2019-2020), Naci Ağbal (November 2020-March 2021), Dr. Hafize Gaye Erkan (June 2023-February 2024), Dr. Yaşar Fatih Karahan (February). 2024-ongoing).”
