@article{article_1786760, title={The Relationship Between Central Bank Reserves and Policy Interest Rates: Evidence from Newly Industrialized Countries}, journal={Ekonomi ve Finansal Araştırmalar Dergisi}, volume={7}, pages={123–146}, year={2025}, DOI={10.56668/jefr.1786760}, author={Akardeniz, Erhan}, keywords={Macroeconomics, Monetary Policy, Central Banks and Policies}, abstract={The relationship between central bank reserves and interest rate decisions is a critical aspect of monetary policy, particularly in Newly Industrialized Countries (NICs). Central banks in these economies frequently face challenges such as managing capital flows, maintaining financial stability, and promoting economic growth. The primary objective of this study is to comparatively analyze how central bank reserves directly influence interest rate decisions and how changes in interest rates affect reserves. Monthly data for the 2015-2025 timeframe is used for NICs. The determinants of reserves and policy rates in developing countries are shaped not only by economic factors but also by geopolitical factors. While central bank interest rate policies directly respond to inflation and exchange rates, they appear to adopt a more strategic approach to reserve accumulation and geopolitical risks. In developing countries, clear inflation targeting, a strong reserve position, and minimizing geopolitical vulnerabilities are essential for policy rate stability.}, number={2}, publisher={Economic and Financial Research Association}