is largely due to falling oil prices as well as our projections that cumulative exchange rate effects will continue to taper off and food price inflation will recede to past years ’ averages. the course of inflation in 2015 will be determined by base effects. we expect base effects to pull annual inflation down until august and push it up the rest of the year. thus, we project that annual inflation will remain on a downward track until the third quarter and increase slightly to 5. 5 percent due to base effects in the fourth quarter ( chart 18 ). in addition to these forecasts, we discuss alternative scenarios on the inflation outlook and the global economy in the risks section of the inflation report. you can examine the report for details. bis central bankers ’ speeches while concluding my remarks, i would like to thank all my colleagues who contributed to the report, primarily those at the research and monetary policy department as well as the members of the monetary policy committee, and thank every one of you for your participation. bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches

these developments caused considerable fluctuations especially in energy - exporting emerging countries. overall, the risk premia of emerging economies followed a volatile course due to the monetary policy uncertainties, the slowdown in economic activity and the course of oil prices ( chart 2 ). effects of this volatility in global markets emerged in the turkish economy as fluctuations of risk premium indicators and exchange rates. the fall in commodity prices, chiefly in oil, is expected to improve the economy especially in terms of inflation and external balance. additionally, the tight monetary policy stance stands out as a factor that limits the negative effects of global volatilities on turkey in this period. annual growth recorded some deceleration following the first quarter of 2014. this was mainly led by receding agricultural output amid unfavorable climatic conditions as well as the slowdown of export growth resulting from geopolitical risks. indicators regarding the last quarter show that annual growth remained moderate due to weak foreign demand. in 2015, we expect the growth rate to increase gradually with the increased contribution of domestic demand. bis central bankers ’ speeches the positive effects of the tight monetary policy stance and macroprudential measures continued in the last quarter of 2014 leading the core inflation trends to approach the target. moreover, plummeting oil prices supported the disinflation process and inflation expectations have recently seen a noticeable improvement. due to the fading cumulative effects of the exchange rate, the reverting of food inflation to past years ’ averages as well as the falling oil prices, we project a notable decline in inflation in 2015. accordingly, inflation is estimated to approach the levels consistent with the target in mid - 2015. 1. monetary policy and financial conditions the central bank of the republic of turkey ( the cbrt ) maintained its tight stance in the last quarter of 2014 and in consideration of global volatilities, supported the tight monetary policy with a tight liquidity policy. as you can see on the slide, the bist overnight repo rates have remained close to the upper bound of the interest rate corridor since october in line with the liquidity policy ( chart 3 ). the cbrt funding has been made mainly through one - week repo auctions since early 2014 ( chart 4 ). thus, the cbrt average funding rate hovered around the 1 - week repo rate in this period. as we all know, core inflation trends are following a downward trend. considering the fall in oil prices and improved expectations that result in favorable developments in the