the average auction interest rate ; a ) at maximum of 1 percentage point above the borrowing rate of the central bank announced for the intra - day transactions to reduce fluctuations in o / n interest rates, in cases where the liquidity shortage in the market is envisaged temporary and when the technical interest rate cut explained in paragraph 45 is not applied, b ) approximately at the mid point of the o / n borrowing and lending rates of the central bank, in cases where the liquidity shortage in the market is envisaged permanent and the technical interest rate cut explained in paragraph 45 is applied. iv ) the weekly repo auctions will be held at 11 : 00. and the results will be announced on reuters ’ “ cbtg ” page no later than 11 : 30. the traditional method will be used in auctions ; in other words, the successful bidders will be evaluated with their own interest rates. v ) in case of unforeseen excessive liquidity shortage during the day, which would exert excessive pressure on money market interest rates, the cbrt may announce “ intraday repo auctions ” in addition to the regular ones announced at 11 : 00. vi ) the primary dealer banks will be able to conduct repo transactions within the framework of open market operations, between 10 : 00 - 12 : 00 and 13 : 00 - 16 : 00. vii ) in case of an excessive increase in the liquidity surplus in the market, mainly the central bank liquidity bills with maturity up to 91 days, and when necessary new turkish lira deposit buying auctions with standard maturities of 1, 2 and 4 weeks and reverse repo auctions with maturities up to 91 days will be used actively, in order to enhance the effectiveness and flexibility of monetary policy and liquidity management strategy. however, the central bank will continue to focus on sterilizing the excess liquidity, which is at such a level that would bring the overnight interest rates in the money markets close to the central bank borrowing rates, through overnight transactions. viii ) in case of the emerge of extraordinary fluctuations in the market even at reasonable levels of excess liquidity, the central bank may allow the overnight interest rates to fluctuate between the central bank overnight borrowing and lending interest rates range by sterilizing the excess liquidity drained in overnight transactions through liquidity bills, new turkish lira deposit buying auctions and reverse repo auctions, in order to reduce the said fluctuations. ix ) in

##january, but eased significantly after the implementation of the recent cbrt measures. figure 16. options implied tl volatility ( 1 - month, percent ) us election coup attempt cbrt policy response 02. 17 01. 17 12. 16 11. 16 10. 16 09. 16 08. 16 07. 16 06. 16 05. 16 04. 16 03. 16 02. 16 01. 16 source : bloomberg. dear participants, let me wrap up my speech by highlighting the value of close policy coordination. turkey has faced a series of significant shocks in the past years. most recently, the slowdown in the economic activity, tightening in financial conditions, sharp currency depreciation, and rising inflation have necessitated a coordinated action by all relevant authorities. central bank has mainly focused on inflation and fx developments during this period. we used our rich toolkit to tighten monetary policy, but at the same time provided liquidity support to fx market through reserve requirements and other tools. as part of the coordinated policy mix, other authorities have taken a series of measures to support the credit channel and economic activity. in order to stimulate the loan supply and demand, the bank regulation authority has released some of the buffers accumulated in recent years, including the maturity restrictions and loan - loss provisions. the government has announced a stimulus package to contain a possible adverse feedback loop between economic activity and loan supply. to this end, collateral conditions were eased for corporates, several incentives were provided to stimulate investments and exports, direct support for sme loans were provided through government guarantee schemes and loan restructuring processes. most recently, tax cuts have been introduced for certain durable products to support demand and production without generating inflation. moreover, as a reflection of the enhanced fiscal - monetary policy coordination, the finance ministry announced clearly that no tax hikes are envisaged in 2017. we anticipate that these concerted efforts will not only bring inflation gradually towards our medium term target of 5 percent but also support the economic recovery in the forthcoming period. thank you for your attention.