monetary policy stance will be maintained by keeping a flat yield curve. a further assumption is that the annual loan growth rate will reach nearly 15 percent by the end of 2014 and stabilize around these reasonable levels on the back of the macroprudential measures. accordingly, we expect inflation to be, with 70 percent probability, between 8. 4 percent and 9. 4 percent ( with a mid - point of 8. 9 percent ) at end - 2014 and between 4. 6 percent and 7. 6 percent ( with a mid - point of 6. 1 percent ) at end - 2015. we expect inflation to stabilize around 5 percent in the medium term ( chart 18 ). we expect inflation to considerably exceed the 5 - percent target by the year - end, and decrease significantly as of the start of 2015 and fall to 6. 1 percent at end - 2015. this noticeable decline we forecast in inflation is driven by the projections that cumulative exchange rate effects will continue to taper off, food inflation will recede to past year averages and commodity prices, chiefly oil, will stay at expected lower levels. moreover, we believe that demand conditions and the announced tight fiscal policy stance will support the decline in inflation in this period. the fluctuating course in 2015 inflation forecasts that you see on the slide stems from the base effects ( chart 18 ). distinguished guests, in addition to these forecasts, alternative scenarios on the inflation outlook and the global economy are discussed in the risks section of the inflation report. you can examine the report for details. 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

erdem basci : recent economic and financial developments in turkey speech by mr erdem basci, governor of the central bank of the republic of turkey, at the press conference for the presentation of the october 2014 inflation report, ankara, 31 october 2014. * * * original presentation is on the central bank of the republic of turkey ’ s website : http : / / www. tcmb. gov. tr / wps / wcm / connect / 47fed704 - 6c8d - 48a4 - 9fce - 458bc4bad30b / er _ ekim _ 2014 _ konu % c5 % 9fma _ % c4 % b0ngilice. pdf? mod = ajperes & cacheid = 47fed704 - 6c8d - 48a4 - 9fce - 458bc4bad30b distinguished guests, welcome to the briefing held to convey the main messages of the inflation report. i will now present an overview of the report, which will be published on our website soon. the report typically summarizes the economic outlook underlying monetary policy decisions, shares our evaluations on macroeconomic developments and presents our medium - term inflation forecasts, which were revised in view of the developments in the last quarter, along with our monetary policy stance. in addition to the main text, the report includes six boxes entailing interesting and up - to - date analyses on various topics. for example, the report presents boxes that analyze how the determinants of bond flows into emerging economies change over time and the sensitivity of inflation to output gap and loans. moreover, there are studies elaborating on current account fluctuations and current account deficit corrections, non - core liabilities, the correlation between capital flows and loan growth across a wide range of economies and the role of macroprudential measures in the elasticity of loans to capital flows. titles of the boxes are shown on the slide. all of these analyses shed light on noteworthy issues in the turkish economy. i strongly recommend that you read these boxes, which will soon be published on our website. distinguished guests, i would like to commence my speech by reviewing the global economic outlook given its undeniable influence on our policies. in the third quarter of the year, the uncertainty over advanced country monetary policies led to a partial volatility increase in global financial markets. while the us federal reserve ( fed ) ended its quantitative easing program,