Turkey’s Central Bank, whose resistance to government pressure to lower interest rates proved to be the right decision, has not had the same success in ensuring financial stability by controlling inflation.

The Central Bank’s record against inflation has been dismal not only this year, but for several years. Since Erdem Basci was appointed its governor in 2011, none of the bank's inflation aims have been achieved.

In 2011, the annual inflation was predicted to be 5.5% but ended up at 10.4%. In 2012, the bank's inflation target was 5%, but it ended up 6.16%. The 2013 target was 5% but the result was 7.4%. The 2014 target was set at 5.3%, then adjusted upward to 6.6%. But it's now clear that even that target won’t be hit.

Turkey’s Central Bank has two basic duties: keeping inflation under control and ensuring stability in financial markets. In 1997, the bank and the Treasury signed a protocol to cooperate to lower the inflation rate. The idea was to lower inflation by adopting monetary and financial measures in cooperation with relevant public agencies. Though this protocol is valid, inflation still cannot be lowered.