to the experience gained from domestic crises in the recent past, we were able to make prompt and effective decisions, thus we were able to do our part to minimize the adverse impacts of the global crisis. in this period, the soundness of the financial system in addition to the relatively limited deterioration in the risk premium provided monetary policy with an extra room for maneuver. 38. accordingly, envisioning that undershooting the inflation target at year - end has been more likely, we continued the rate cut cycle that we initiated in november 2008 by pursuing a front - loaded monetary policy in early 2009. despite signals of partial recovery in domestic economic activity as of may, we continued rate cuts until november 2009 in view of the ongoing uncertainties pertaining to the strength and sustainability of the demand recovery and also anticipating that it would take a considerable period of time before economic activity recovers and employment conditions would improve. the policy rate cuts were terminated in december 2009, due to stronger perceptions that economic activity had started to recover. thus, the policy rates were cut by a total of 1025 basis points since november 2008. monetary policy committee ’ s policy rate decisions in 2009 policy rate decision policy rate ( percentage point ) ( percent ) january 15, 2009 - 2. 00 13. 00 february 19, 2009 - 1. 50 11. 50 march 19, 2009 - 1. 00 10. 50 april 16, 2009 - 0. 75 9. 75 may 14, 2009 - 0. 50 9. 25 june 16, 2009 - 0. 50 8. 75 july 16, 2009 - 0. 50 8. 25 august 18, 2009 - 0. 50 7. 75 september 17, 2009 - 0. 50 7. 25 october 15, 2009 - 0. 50 6. 75 november 19, 2009 - 0. 25 6. 50 december 17, 2009 no change 6. 50 january 14, 2010 no change 6. 50 february 16, 2010 no change 6. 50 march 18, 2010 no change 6. 50 april 13, 2010 no change 6. 50 meeting date source : cbrt. 39. developments following the initiation of policy rate cuts have confirmed our projections on the magnitude of the crisis and its impact on economic activity and on inflation outlook, and have justified our policy decisions. this, in return, enhanced the effectiveness of the monetary policy decisions on financial variables and expectations. consequently, in 2009, determining role of central bank in shaping market interest rates has improved and hence, market interest rates came down to historic low

durmus yilmaz : recent economic and financial developments in turkey opening speech by mr durmus yilmaz, governor of the central bank of the republic of turkey, at the 78th ordinary meeting of the general assembly, ankara, 20 april 2010. * * * i. introduction 1. esteemed shareholders, distinguished guests and members of the press, welcome to the 78th ordinary meeting of the general assembly of the central bank of the republic of turkey. 2. i would like to start my speech with a brief evaluation of the global financial crisis that deepened to spread over the whole world in the final quarter of 2008 and took its toll throughout 2009. later on, i will summarize the key macroeconomic developments that took place in turkey in 2009. finally, i will share my evaluations pertaining to inflation developments and monetary policy implementations. ii. global economic developments distinguished guests, 3. the effects of the financial crisis, which first started in advanced countries and deepened mainly due to the bankruptcy of some major financial firms in the usa in september 2008, continued to dominate financial markets throughout 2009. accordingly, growth rates slumped globally but particularly in advanced countries. owing to extensive liquidity operations led by central banks and large - scale government interventions, the effects of the crisis started to subside as of the second half of 2009 and the global economy exhibited signs of a slow and gradual recovery. 4. the recovery in global economic activity that started on the back of the historically large fiscal stimulus packages launched by advanced economies contributed to the improvement of global risk perceptions and normalization of financial markets. readings on economic activity and global financial system in the first quarter of 2010 point out that the recovery is ongoing. however, soaring budget deficits – especially in advanced economies – reach levels of concern, problems across credit markets linger, and unemployment rates continue to remain elevated, all suggesting that it would take a long time for the global economic problems to be resolved permanently. moreover, ongoing uncertainties regarding the exit strategies from unconventional monetary and fiscal measures continue to pose risks on the sustainability of the recovery. 5. it is observed that advanced and emerging market economies started to recover as of the second quarter of 2009, mainly on the back of expansionary monetary and fiscal policies implemented worldwide and on inventory accumulation mostly in advanced economies. despite positive signs of recovery in the global economy, high unemployment rates in advanced countries, primarily in the usa and euro area, still persist. with global economic growth mainly based on expansionary monetary and fiscal