The Importance of Harmonious Monetary and Fiscal Policies: An Examination upon Credit Interest Rates of Banks in Turkey

Ekonomi, İşletme ve Maliye Araştırmaları Dergisi, Cilt 1, Sayı 2, 2019 s. 88-102

15 Pages Posted: 31 Mar 2019

Date Written: March 1, 2019

Abstract

High bank interest rates have been one of the main problems in certain periods for Turkey. When the development trend of interest rates is examined, it is seen that interest rates were high in the past, they decreased between 2002 and 2010, and they have been increasing after the year 2011. In order to reach low bank interest rates, monetary and fiscal policies are the main tools that can be used. Therefore, the application of monetary and fiscal policies in a harmonious way has substantial importance. Within this context, this study is prepared to evaluate the recent experience of Turkey in terms of harmonious monetary and fiscal policies. In this context, the period after 2010 is included and the period after 2016 is focused especially. Hence, recent approaches and practices in Turkey in terms of the harmonious policy are examined. As a result of the study, it is determined in the study that tight monetary policy and loose fiscal policy are applied generally in Turkey. However, monetary and fiscal policies have begun to be harmonious with the last quarter of 2018. In this context, the credit interest rate of banks has been decreasing with the last quarter of 2018 which was increasing since 2017. This shows that harmonious policies are so important that low bank interest rates cannot be reached without the practice of harmonious policies. This is the most important point that should be stated. Therefore, if it is desired to reach a low credit interest rate of banks, it is highly recommended that Turkey should always adopt harmonious monetary and fiscal policies.

Keywords: Banking, Interest Rate, Harmonious Monetary and Fiscal Policies, Turkey

JEL Classification: E31, E58, E63, O24, P44

Suggested Citation

Kartal, Mustafa Tevfik, The Importance of Harmonious Monetary and Fiscal Policies: An Examination upon Credit Interest Rates of Banks in Turkey (March 1, 2019). Ekonomi, İşletme ve Maliye Araştırmaları Dergisi, Cilt 1, Sayı 2, 2019 s. 88-102, Available at SSRN: https://ssrn.com/abstract=3347719

Mustafa Tevfik Kartal (Contact Author)

Borsa Istanbul ( email )

Reşitpaşa Mah. Borsa İstanbul Cad. No: 4
Borsa İstanbul Cad. No: 4
Istanbul, 34467
Turkey

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
5
Abstract Views
192
PlumX Metrics