##economic stability will undoubtedly make turkey a more competitive country in the international arena. looking ahead, our main goals are to achieve and sustain price stability and economic growth. prerequisites are macroeconomic stability, structural reforms and adherence to good governance principles both in public and private institutions. we recognize that economic growth at the expense of price stability cannot be permanent. together with the eu anchor in place, we are moving decisively to become a trillion usd economy. thank you.

the state - owned banks ’ structural problems, is putting substantial constraints on the monetary policy actions, making financial markets more fragile. in view of this important issue, the state - owned banks have started to lessen their overnight borrowing from other banks and non - banking institutions in the short - term by obtaining liquidity from the central bank through repurchase or outright selling transactions against government papers given by the treasury to cover their duty losses. a similar process is running for the banks taken over by the saving deposits insurance fund. the central bank and the treasury are absorbing the excess liquidity from the market through reverse repurchase transactions and through selling government papers. dear shareholders, distinguished guests and valuable press members ; in view of the current economic conditions, the economic literature also indicates that, pursuing a tight monetary policy to stabilize exchange rate right after the emergence of crises has certain setbacks. although a post - crisis policy implementation can reduce the fluctuations in the exchange rates, the resulting higher interest rates will negatively affect both the domestic debt stock and the real sector. furthermore, i believe that once the setbacks are eliminated right after the crisis and once the amendments are made in the central bank act, we will be able to use short - term interest rates actively as a monetary policy instrument in the medium - term. a more efficient monetary policy implementation will be ensured through easing the fiscal burden on the financial markets and through reinforcing the banking sector, which will lay the ground for inflation targeting. in the near future, we will continue to do the technical works for inflation targeting. these works will include, choosing an appropriate price index ; determining a transmission mechanism that would show how monetary policy instruments might influence the prices and how the pressures might come up on the prices ; determining a targeting band and its period. in short, the central bank will shift from a post - crisis policy aimed at short - term financial stability toward price stability, once the necessary conditions have emerged. let me point out that, developments in november 2000 and in february 2001 highlighted once again the importance of achieving the structural and financial reforms, which is one of the keystones for the medium - and long - term stability of the economy. at this point, i would like to underline that the existence of a healthy financial system can be considered as a public good with substantial positive externalities. once the system is relieved from the burden of the state - owned banks, both the borrowing costs will decline and the central bank will get an upper hand in its