Governors,
Colleagues, Friends, and
Distinguished Guests,
It is a great pleasure to welcome you to this Conference on the occasion of celebrating the 75th anniversary of the Central Bank of the Republic of Turkey. As this conference is also President Trichet’s first official visit to the Central Bank, I would like to express my heartfelt gratitude to him for joining us at this special event.
On occasions like these, I believe, it is appropriate to look back and make an assessment of the institutional progress the Central Bank of Turkey has made since its inception. I would therefore like to take this opportunity to share with you the most significant changes taken place in the Bank’s history, and then focus on the recent developments in the implementation of monetary policy. Finally, from a medium to long-term perspective, I would like to say a few words on the future of monetary policy in Turkey.
As we know during the 30 years or so immediately preceding the First World War, major world currencies were based on gold, in the sense that the value of the currency in one way or the other was closely linked to the intrinsic value of the metal itself. However, after the First World War, countries one after another abandoned the gold standard and adopted what is called the fiat money. That is, paper money and the gold had gone through a divorce. Therefore under the prevailing circumstances printing money and managing the financial system had become more important, which created a more compelling need for the establishment of strong institutions to take care of banknote issuing and to safeguard the value of money.