attach importance to keeping deposit rates at a level that would not increase dollarization. therefore, safeguarding the balance of turkish lira liquidity, we have decided to implement a quantitative tightening. in this way, the excess liquidity accumulated in the system will be sterilized through reserve requirements. according to impact analyses, 450 billion - to - 500 billion turkish liras of liquidity will be withdrawn from the system via this step. 7 / 11 bis - central bankers'speeches through selective credit tightening, we aim to prevent damage to price stability due to the channeling of financial resources to consumption instead of supply. accordingly, we have reduced the growth limit for vehicle loans from 3 % to 2 %. we have also decreased the growth limit for commercial loans, excluding investment, export, agriculture and tradesmen loans, from 3 % to 2. 5 %. besides, we have raised the monthly maximum interest rate applied to credit card cash utilization and overdraft accounts to support the balancing of domestic demand. as for interest rates, the first tier has been removed for turkish lira commercial loans excluding export and investment loans. applying a single - tier interest rate threshold for corporate loans will make an additional contribution to the supply / demand balance. i would like to emphasize that we use all our tools with a holistic approach by carefully analyzing and optimizing the potential impacts of our decisions. with the same approach, we will continue to take gradual and decisive steps. the central bank's international reserves have been increasing strongly since june. gross international reserves declined from 128. 8 billion dollars at end - 2022 to 98. 5 billion dollars at end - may. our reserves have increased by approximately 15 billion dollars to more than 113 billion dollars as of 14 july. there is a positive outlook in the risk premium. the five - year cds premium exceeded 700 basis points in may due to domestic uncertainties, hitting the peak of this year. however, it started to register a significant downtrend in june, and dropped to 435 points as of today. amid the decline in risk premiums, a net portfolio inflow of more than 1. 5 billion dollars has been recorded since june. we also see a decline in exchange rate volatilities in the market. the exchange rate volatility implied by one - month us dollar / turkish lira options fell sharply from its peak of 57 points in may to 20. 2 points as of 25 july. likewise, the exchange rate volatility implied

less at the same time across countries. however, emerging economies started rate hikes earlier than advanced economies and have been more successful in reducing core inflation. distinguished participants, after giving a brief account of inflation and monetary policies in other countries, i would like to share with you our evaluations regarding inflation in our country. inflation fell to 38. 2 % as of june from its october peak of 85. 5 %. this was driven by stability of exchange rates and global commodity prices that began to decline. contributions of subgroups to june annual inflation indicate that the largest contribution to the decline of inflation came from core goods, food, and, in particular energy, influenced favorably by global commodity prices. meanwhile, that of services which reflect the stickiness of inflation remains flat around 15 points. we are closely monitoring a series of indicators for underlying trend of inflation. to identify the underlying inflation, we use approaches based on " methods of exclusion ", such as the b and c indices, as well as " statistical methods " such as satrim and median inflation. to better understand the near - term dynamics, we examine monthly or quarterly seasonally adjusted inflation data. the broad set of indicators that we track pointed to strengthening in the underlying trend of inflation in june. this is driven by strong domestic demand, wage and exchange rate developments, and the stickiness of services inflation. data for the second quarter of the year suggest that domestic demand was particularly influential in robust economic activity. the retail sales volume index, domestic card expenditures and turnover indices imply acceleration in consumption. 3 / 11 bis - central bankers'speeches consumers'plans to spend on durable goods surged in the second quarter. sales of automobiles and white goods are considerably higher than their previous period averages. despite the outlook i have summarized for domestic demand, aggregate supply has been more moderate. annual growth of industrial production and exports has been slowing since the second half of 2022 in line with external demand. although the earthquake induced production loss in the first quarter was recovered in the second quarter, the annual rates of increase in these indicators are close to zero. the fall in capacity utilization rates in the second half of last year continued in the first quarter due to the disaster. in july, capacity utilization rates are still below their previous year levels. the outlook for domestic demand and production suggests that aggregate demand conditions remain inflationary. having weakened in the second half of 2022, the average of output gap indicators we monitor rose to 2. 3 % as of the second quarter of