in case of a recovery in the liquidity conditions due to developments in the international markets ; ( i ) the central bank may, with prior notice, resume foreign exchange buying auctions in line with the general strategy of strengthening foreign exchange reserves at times when foreign exchange supply increases compared to the foreign exchange demand. ( ii ) the central bank might cease to perform its intermediary function in the foreign exchange deposit market. however, even in such a case, banks will still be able to borrow foreign exchange deposits from the foreign exchange deposit markets within the predetermined borrowing limits. ( iii ) the fx required reserves ratio might be increased. in view of the fact that financial stability is one of the prerequisites for price stability, the central bank took the necessary measures in order to ensure the efficient operation of turkey ’ s foreign exchange market without facing any liquidity problems. the central bank also announced possible additional measures. nevertheless, bearing in mind that under the current exchange rate regime economic agents operate in an environment of exchange rate risk, they should establish mechanisms that will ensure efficient risk management. liquidity management while drawing up the general framework of liquidity management, the central bank took into consideration following objectives ; ( i ) ensuring that short - term interest rates would remain at or revolve around the level set by the committee, ( ii ) ensuring the efficient and stable operation of money markets by preventing excessive volatilities in short - term interest rates of the money market, ( iii ) ensuring smooth functioning of the payments system. ( iv ) providing the operational structure with sufficient flexibility against unexpected developments in the markets. another important factor that determines the general framework of the central bank ’ s liquidity management is the level of liquidity in the market. the main factors that directly affect the liquidity in the market are as follows : ( i ) changes in monetary base, ( ii ) the central bank ’ s foreign currency purchase / sales transactions, ( iii ) interests paid / collected by the central bank for open market operations and interests paid by the central bank for try reserve requirements, ( iv ) the treasury ’ s primary surplus, ( v ) the spread between the treasury ’ s redemption and issue of net try government bonds, excluding the central bank, ( vi ) privatization and sdif - related try transfers to the treasury. in addition, as treasury determines the try - denominated borrowing requirement, the treasury ’ s net fx - denominated collections or payments including domestic and external borrowing

##ntial instruments might not be needed in the direction of tightening, as domestic credit expansion will weaken. distinguished guests, i would like to underscore once more that as the central bank, our primary objective is to achieve and maintain price stability, and that as stipulated by article 4 of the cbrt law, we are responsible for “ taking precautions for enhancing the stability in the financial system and taking regulatory measures with respect to money and foreign exchange markets ”. therefore, we will continue to act with due diligence in terms of financial stability in the upcoming period as well. however, the central bank is not the only entity in charge of financial stability. other public authorities such as the ministry of finance, undersecretariat of treasury, capital markets board of turkey, and primarily the banking regulation and supervision agency, also have significant authority and policy instruments in this regard. it is essential that in the period we are going through, all policy instruments in hand should be deployed in a coordinated manner for the establishment of a sounder and more stable financial structure. to close my remarks, i would once again like to thank everyone who has contributed to the organization of this event.