No, it is not. If you are a normal market participant and you feel left out in deciphering the meaning behind the recent actions of your central bank, obviously, the central bank is not doing its job properly. Either the bank has difficulty in formulating and conveying its message or there is no message to convey. Either way, there is an apparent disconnection. That is what we have in Turkey, for now. We have a maverick Central Bank speaking in a language unknown to market participants. That is bad by definition. A central bank that has not taught its medium of communication to its customers, i.e. financial market participants, at the outset is a bad central bank. Let me start from here: We have a bad central bank in Turkey.

It was Mervyn King in 2000 who noted that "transparency should lead to predictable policies. Hence a successful central bank should be boring." I know it is hard to be boring nowadays. We are in another period of "all that is solid melts into air." However, I still have difficulty in understanding why the Central Bank has lost its ability to move in tandem with market participants. It beats me as a founding external member of the monetary policy committee (MPC). Central banking is like a dance and ours lately has been doing steps unknown to its partner. One thing we should have learned from the developments in central banking theory so far is that transparency is good, communication works, and the bank has to train its dancing partner regarding the dance steps for a graceful show.

However, the Central Bank of Turkey surprised market participants again last week. The bank also did this at the end of last year. Is it because of the rapidly changing global conditions? Maybe. At the end of 2010, the bank focused on limiting short-term fund inflows and slowing down the record credit expansion. The bank has used different instruments for these two objectives. The decisions have created an environment of reasonable doubt thanks to the bank's previous credibility buildup. It became obvious to everyone in mid-2011 that both measures were not working. However, the Turkish Lira has depreciated about 25 percent since the end of 2010 due to shaky external and fiscal account fundamentals and the central Bank's confusing policy stance. If the hidden agenda is all about controlling depreciation with a confusing policy stance, then so far so good.

Last week, the MPC increased the overnight rate for short-term fund inflows. In fact, it reversed its earlier decision to cope with increasing risk awareness in global markets. That is the understandable portion. But then there happened to be a reversal: The bank lowered its policy rate again. Who would ever think of making investments amid such financial instability? I don't know.

Central Bank independence was also among the gains of the last two decades. Maybe the bank has reverted to the language of politics nowadays. Maybe that is why market participants have had difficulty lately in understanding the message.

This commentary was published in Hürriyet Daily News on 06.08.2011