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Quantitative Measures and Moderating Power of Monetary Policies: Insight from the Analysis of the Link between Equity Sector Indices with Money Supply

Quantitative Measures and Moderating Power of Monetary Policies: Insight from the Analysis of the Link between Equity Sector Indices with Money Supply
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Author(s): Orhan Özaydın (İstanbul Medipol University, Turkey)and Edmund Ntom Udemba (Shanxi Technology and Business University, China)
Copyright: 2025
Pages: 30
Source title: Macroeconomic Challenges to Structural Reform and Industrial Development
Source Author(s)/Editor(s): Oytun Meçik (Eskişehir Osmangazi University, Turkey)
DOI: 10.4018/979-8-3693-5508-4.ch011

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Abstract

Re-evaluation of the critical macroeconomic indices behind the movement of money and other financial assets with respect to the flow and supply of money for the case of Türkiye is essential at this present economic situation of Türkiye. Türkiye's economic activities have been, and still passing through unstable development due to excessive inflation and poor performance of the foreign exchange rate. To this end, authors applied the monthly end price data from 2005 December to 2022 March to researched 10 different Istanbul Equity Indices (IEI) as dependent variable, to see whether they are related with Money supply for the case of Türkiye. From the quantitative analysis of the indices, all control variables including USD/TRY and BOND2Y coefficients are negatively correlated with equity indices and statistically significant. Furthermore, the impact of Central Bank reserves and deposits to the Central Bank (M1) and term deposits at banks (M2 minus M1) on sector indices is found to vary significantly across different sectors.

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