erdem basci : the importance of commodity price movements opening remarks by mr erdem basci, governor of the central bank of the republic of turkey, at the conference on “ policy responses to commodity price movements ”, istanbul, 6 april 2012. * * * distinguished guests, welcome to the conference on the “ policy responses to commodity price movements ” jointly organized by the international monetary fund, the imf economic review and the central bank of the republic of turkey. as i will deliver another speech in the panel session on the second day of the conference, i will attempt to keep this inaugural speech as brief as possible. as you will recall, we hosted a conference on commodity price volatility in istanbul last september within the context of g - 20 program. these two conferences on similar topics in such a short time are clear indicators of how important the commodity price movements are for the global economy. why are commodity prices so important? when we think of what is covered by “ commodities ” more closely, we also come up with how we should approach this issue. usually, the term “ commodity prices ” represent energy prices ( mainly the crude oil ), food prices and the prices of some main industrial inputs. energy prices are very closely monitored by economic units and policy makers, for it denotes the cost of one of the most significant inputs for the entire economy. energy is one of the primary cost factors for firms. it is also a considerable item for households ’ heating and transportation expenditures. on the other hand, due to its high share in the expenditures of especially low - income households and corresponding purchasing power effects, food prices are given a great importance by policy makers. meanwhile, the metals, such as iron ore, copper and aluminum, are among the most important raw materials for the industry and construction sector. the reason why commodity prices have been frequently attracting attention is the current fluctuations in commodity prices of a magnitude that has not been seen since 2007. price of brent crude oil, which was usd 50 per barrel in early 2007, climbed to usd 145 within one and a half year. then, parallel to the deepening global crisis in late 2008, crude oil prices went back to usd 35 ; and now it is hovering around usd 125. and the uncertainties about oil prices, resulting from demand and supply - side developments, and their potential effects keep the policymakers interest in commodity prices alive in the current economic outlook. as they are among the risk factors that affect the inflation outlook, we directly referred

along the way both directly though firm specific supervisory dialogue but also through industry wide events like this. we will also be 5 / 6 bis central bankers'speeches continuing to evolve our own supervisory and policy approach to ensure it supports this industrywide effort. i would like to thank you for your time today and i look forward to ongoing engagement with you all, including through the discussion to come, as we collectively move this work forward. i would like to thank helen stone and harry grantham - hill for their invaluable help in preparing these remarks. 1 ps6 / 21 | cp29 / 19 | dp1 / 18 operational resilience : impact tolerances for important business services 2 ss2 / 21 outsourcing and third party risk management 3 operational resilience – outcomes in practice - speech by lyndon nelson | bank of england 4 examples of frameworks and tools include but are not limited to : • ocir catalogues ( ) ; • operational risk management framework ( ormf ) assessment triggers ; • icaaps ( ) ) ; • firms ’ incident management ; and • risk and control self - assessments ( rcsas ). 5 prudential regulation authority statement on the 2022 cyber stress test : retail payment system 6 financial policy summary and record of the financial policy committee meetings on 9 and 18 march 2022opens in a new window ( bankofengland. co. uk ) 6 / 6 bis central bankers'speeches