The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Turkey: Just what is Basci up to?

The Turkish central bank governor’s unorthodox policies have riled, muddled and, say some, outsmarted markets. He thinks they work. But is he trying to do too much with so many different instruments and targets?

Erdem Basci, Turkey's central bank governor
Erdem Basci, Turkey's central bank governor

Everyone recognizes Turkey’s challenges with hot-money flows, especially over the past two years. Just last month, for example, the central bank governor noted a "re-acceleration in capital inflows". But the central bank governor’s unconventional policies and multiple targets to deal with this have brought hostility, confusion and praise. "He’ll either win the Nobel Prize or it’ll end in tears," was the verdict of a prominent emerging markets economist on Erdem Basci’s policies. The prediction was for the latter. By late April, neither of those things had happened.

In the first part of 2013, in fact, Basci has continued in the same direction, surprising outsiders by trying to cool the market, not by an old-fashioned hawkish monetary policy, but by rapidly lowering rates and simultaneously increasing cash-reserve requirements – policies that would usually be seen as contradictory. Albeit with more complex use of rates and different reserve requirements, Basci was using a similar approach to the one that caused so much consternation from late 2010 until late 2011: a time when Turkey’s economy grew almost as fast as China’s and the current account deficit ballooned.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree