International Journal of Social Science & Economic Research
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Title:
The Moderating Role of Global Risk Appetite: VIX and the Transmission of CBRT Policy Rate to Turkish Financial Markets

Authors:
Sebnem Bilge Bayram

Journal: International Journal of Social Science and Economic Research (IJSSER)
ISSN: 2455-8834
Volume: 11
Issue: 9
Publication Date: September 2026
DOI: 10.46609/IJSSER.2026.v11i09.044

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Sebnem Bilge Bayram
ARGEM High School, TURKEY

MLA 8
Bayram, Sebnem Bilge. "The Moderating Role of Global Risk Appetite: VIX and the Transmission of CBRT Policy Rate to Turkish Financial Markets." Int. j. of Social Science and Economic Research, vol. 11, no. 9, Sept. 2026, pp. 5193-5202, doi.org/10.46609/IJSSER.2026.v11i09.044. Accessed Sept. 2026.
APA 6
Bayram, S. (2026, September). The Moderating Role of Global Risk Appetite: VIX and the Transmission of CBRT Policy Rate to Turkish Financial Markets. Int. j. of Social Science and Economic Research, 11(9), 5193-5202. Retrieved from https://doi.org/10.46609/IJSSER.2026.v11i09.044
Chicago
Bayram, Sebnem Bilge. "The Moderating Role of Global Risk Appetite: VIX and the Transmission of CBRT Policy Rate to Turkish Financial Markets." Int. j. of Social Science and Economic Research 11, no. 9 (September 2026), 5193-5202. Accessed September, 2026. https://doi.org/10.46609/IJSSER.2026.v11i09.044.

References

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ABSTRACT:
Over recent decades, emerging economies have become deeply integrated into the global financial architecture, rendering their domestic asset classes vulnerable to international investor sentiment. This dynamic complicates the efforts of local central banks attempting to stabilize markets during global stress. As a result, the response of emerging markets to local monetary policy decisions became highly sensitive to fluctuations in global risk appetite. This paper empirically investigates the impact of the Central Bank of the Republic of Turkey's (CBRT) policy rate changes on BIST(Borsa Istanbul), USD/TRY, and Bond Interest Rate returns, focusing on the moderating role of the global volatility index (VIX) within this transmission mechanism. Utilizing an Ordinary Least Squares (OLS) regression model based on a time-series dataset of 5234 observations, the study measures the influence of global uncertainty on local equity markets. The empirical results demonstrate that the interaction term between the VIX and policy rate changes is highly statistically significant and negative. These findings prove that during periods of deteriorating global risk perception and heightened volatility, the effectiveness of domestic monetary policy actions on the stock market is structurally dampened. Ultimately, the study supports the hypothesis that exogenous financial shocks severely limit the local policy transmission mechanism in emerging markets.

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