infrastructure for implementation of monetary and exchange rate policies in compliance with the market economy. In the same period, it was decided that interest rates on deposits and loans would be determined by market conditions. Furthermore, the fixed exchange rate system was abandoned and the Turkish currency devalued against foreign currencies. In 1983, the Bank was empowered to manage gold and foreign exchange reserves effectively. In addition, it was incorporated into the Law that the Bank would carry out its fundamental duties in compliance with the basic requirements of the economy and with the objective of achieving price stability. The Central Bank started to conduct open market operations in 1987 and became a pioneer in the establishment of money and foreign exchange markets in the modern sense. In 1989, with “Decree No. 32 on the Protection of the Value of Turkish Currency”, economic units were allowed to conduct foreign exchange transactions, and having declared the Turkish currency “convertible”, a relatively more flexible exchange rate regime was adopted. In 1990, the Bank announced a monetary program for the first time, which aimed to meet the liquidity requirement of the market without endangering the stability of exchange rates and interest rates. The targets announced in 1990 were achieved; yet, problems such as the pressure of the Gulf War on the financial sector, political instability, lax financial policy and the fragile structure of the banking sector hindered achievement of macroeconomic stability and led to a financial crisis in the first quarter of 1994. The initial regulations proposed to prevent financing of public debts – a key element of the period of high inflation – by Central Bank resources coincide with this period. On 21 April 1994, limitations were imposed on the Treasury's use of Central Bank funds; and with the protocol signed between the Central Bank and the Treasury in 1997, it was concluded that the Treasury would not use short-term advances from the Central Bank from 1998 onwards. The 2001 Crisis and Post-Crisis Period In the 1995-1999 period, the Central Bank followed policies geared towards ensuring stability in the financial markets. A period of uncontrollable inflation paved the way for the adoption, in the year 2000, of an exchange rate based new stability program. However, amid the aggravating loss of confidence in the economy that started by the end of 2000 and the crisis that broke out in mid-2001, the said program