A New Monetary Analysis Tool: The Daily Liquidity Dataset

The term of liquidity is complex and unclear in the economic literature. This paper tries to explain this concept in practice for the Turkish economy. The statistics of EFT (Electronic Fund Transfer) system and the analytical balance sheet of the Central Bank of Turkish Republic are used to explain what the liquidity is and how the liquidity situation changes in the country’s financial system. The liquidity is classified as “market liquidity”. The EFT system is used to materialize the market liquidity and the statistics of EFT system are used to explain the volume of market liquidity. The daily liquidity dataset for Central Bank of Turkish Republic is created and the determinants of the liquidity situation are analysed from perspective of analytical balance sheet. This study identifies that the increase in the currency issued and government sector deposits are main determinants of the liquidity deficit and also concludes that the liquidity surplus results from the increment in net foreign assets and domestic assets. Most importantly, this article shows that Central Bank of Turkish Republic took a countercyclical position against both the liquidity deficit and liquidity surplus between 2013 and 2018 (except 2016).