if china indeed becomes the largest economy in the world, if it develops a market - based monetary policy, if it gradually liberalizes the capital account of the balance of payments and allows the exchange rate to float, and if it can develop the necessary legal framework for the efficient operation of the financial markets, then there would be very good reason for shanghaihong kong to blossom as a financial center. if that were to happen, we could imagine the yuan becoming a major international currency, along with the dollar and the euro. but that is likely to take a long time. and it is an interesting question as to what language will be spoken in that market – i would bet on english. some of these issues have their counterparts on the political side, for instance the debate over the reform of the united nations, especially the security council in this regard, it helps that china is already one of the permanent members of the council. mumbai has a language advantage, already has a market - based monetary policy and a flexible exchange rate, has a more market - based financial system, and a more developed legal system than has shanghai. but the potential size of the domestic economy will probably cause mumbai to develop more slowly than shanghai as an international financial center. nonetheless there is every reason to believe it will become an increasingly important player in the international financial markets. vi. the rise of asia : political implications so far the international economic system has dealt reasonably well with its changing economic geography. while there are major concerns about how the united states current account deficit will be unwound, about the failure of the doha round, about protectionism more generally, and about the effects of the entry of another billion low - wage workers into the international economy, the overall impact of the rise of asia on the international system seems to have been favorable for most other countries. in addition, the rapid growth of asian economies has contributed to an extremely rapid decline in global poverty in the last quarter century. it is easy to describe crisis scenarios, particularly with regard to the unwinding of the u. s. current account deficit – and many delight and profit from doing so. but overall it seems that the international economy and its market and governmental organizations have sufficient flexibility, and perhaps even the wisdom, needed to deal with the required adjustments. the potential political consequences of the economic rise of two more great powers, and the relative decline of others, could be more worrying. the economic rise of both germany and japan in the second half of the nineteenth century and

earlier. the relatively slow recovery in the services sector also delays the recovery in employment, which also increases the cost of the pandemic incurred by households. we can minimize all these negative consequences by remaining resolute in the struggle with the pandemic, abiding by the measures and continuing the vaccinations. employing all policy tools through this process, central banks will continue to achieve price stability and support the postpandemic normalization. like all central banks, we are closely monitoring the developments regarding the course of the pandemic and its impacts on the global economy. as a result, it is apparent that central banks play an important role both in the past lockdown and the current normalization processes. the recent past revealed that central bank policies were quite effective in ensuring the uninterrupted functioning of the financial system, minimizing the pandemic - led damage suffered by both the banking and the corporate sectors, and capping the economic and social costs of the lockdowns. to ensure that the normalization process continues properly, the central bank of the republic of turkey will take the necessary policy steps, as it has done so far. concluding my speech, i would like to thank you all for your participation.