also declined somewhat in the recent period, albeit still remaining high. for further information about this issue, you can refer to the relevant box in our report. 6 / 12 bis - central bankers'speeches we envisage that our decisions will facilitate an improvement in inflation expectations, and the gap between market expectations and our interim targets will be closed. monetary policy distinguished participants, in this part of my speech, i would like to talk about our monetary policy strategy. as you know, we initiated a strong monetary tightening process in june 2023 to establish the disinflation course as soon as possible, to anchor inflation expectations, and to control the deterioration in pricing behavior. accordingly, we have raised the policy rate from 8. 5 percent to 50 percent. as a technical adjustment, we widened the interest rate corridor in march. in addition, against the divergence in expectations of economic units and possible volatilities, we continue to implement macroprudential policies to enhance the effectiveness of monetary transmission. accordingly, in order to support the rebalancing process in domestic demand, we lowered turkish lira commercial loan and general - purpose loan growth limits to 2 percent, we introduced reserve requirements and terminated securities maintenance practice. moreover, we raised the maximum interest rate on credit cards. in order to reinforce the monetary transmission mechanism and increase the share of turkish lira deposits, we started remunerating turkish lira required reserves according to targets and revised targets for growth of turkish lira deposit share. as of today, we completely terminated the securities maintenance practice in order to enhance the functionality of market mechanisms and strengthen macro - financial stability. thus, we were able to enhance the functionality of the bond market, normalize the yield curve and strengthen the monetary transmission mechanism. we have sterilized the excess liquidity stemming from the exchange rate difference payments of fx - protected accounts and the increase in the cbrt's swap transactions with domestic banks in the final quarter of 2023. more than 1 trillion turkish liras were sterilized from the market via the increases in required reserves. in december, we started holding turkish lira deposit buying auctions to sterilize access liquidity. we are sterilizing the temporary excess liquidity via deposit buying auctions. 7 / 12 bis - central bankers'speeches we will monitor liquidity conditions closely and we will effectively use necessary sterilization tools when necessary. our monetary tightening steps have immediate and strong effects on financial markets. in this part

deterioration brought about by the mis - management of risk affects the economy as a whole. dear guests, when the course of the value of turkish currency versus foreign currency from 2002 up to now is taken into account, it is observed that as long as tight monetary and fiscal policies are maintained ; structural reforms are implemented, political stability is maintained and the decisiveness for macroeconomic stability is sustained ; the basic tendency will be in favor of the appreciation of the turkish currency. this is a process in which the turkish currency is increasingly preferred for investment as in every robust economy although it is subject to occasional interruptions. therefore, the value of the turkish currency emerges as a clear consequence. determination of the foreign exchange rates under the market conditions as a requisite of the floating exchange rate regime does not imply that the bank shall not undertake any transactions in the foreign exchange markets. as it was also explained in detail in our announcement called “ monetary and exchange rate policy for 2007 ”, the central bank undertakes transactions in the foreign exchange markets for two objectives. the first one of these transactions is the daily foreign exchange purchasing auctions that are implemented transparently and under methods in accordance with certain rules to serve the bank ’ s purpose of reserve accumulation. the central bank purchases foreign exchange from the market via these auctions when the supply of foreign exchange is abundant under a moderate reserve - increasing strategy. the second situation in which the bank undertakes transactions is the direct interventions in order to prevent existing or possible excessive volatilities in the foreign exchange rates. these interventions are neither mechanic nor symmetric. the bank evaluates all the changes occurring in the foreign exchange rates with regard to its own conditions and takes the decision for intervention accordingly. as a result of the foreign exchange purchasing auctions and the direct interventions implemented within the scope of the foreign exchange policy, net purchase of 44. 8 billion usd from the market has been made in a period of five years as of 9 january 2007. following the foreign exchange purchases embarked on as of april 2002, reserves of the bank increased by 199 percent and reached 60. 8 billion usd on 29 december 2006. dear guests, now i would like to mention the growth performance of the turkish economy and the things to be done in this respect. the turkish economy has been growing consecutively for the last 19 quarters. gross national product grew by 8. 8 percent in real terms in the second quarter of 2006 ; and the growth rate decreased to 3 percent in the third quarter due to the monetary tightening and