, such as job creation and improvement of incomes. for this reason, the inflation targeting framework retains the fundamental monetary policy paradigm of striking the optimum balance between inflation and output. apparently, when a central bank faces a dilemma of choosing between inflation and growth, inflation remains the priority. an example of this can be seen in the problems we faced last year, when world oil prices almost doubled. this disturbing trend became highly problematic for monetary policy because not only did it boost inflationary pressure, but also inhibit economic growth. many suggested that the central bank did not need to respond to this temporary surge in inflation. however, our view at the time was that despite the temporary nature of the disturbance, the inflationary impact emanating from the higher oil prices through increased price for other goods and services, such as transport and wages, would drive up core inflation. in this situation, the tight policy was necessary to prevent sustained escalation in public inflation expectations. the third characteristic of the itf is that monetary policy is implemented on a transparent basis with measured accountability. in my view, with elements like these, inflation targeting is more than a mere framework for monetary policy. inflation targeting promotes the good governance of a central bank. by announcing the inflation target to the public, the central bank commits itself to its achievement. uncertainty over future inflation will ease because public inflation expectations have a point of reference, and thus economic costs arising from uncertainty will also be reduced. communication to the public on the future monetary policy direction is also vital so that the public can anticipate the central bank monetary policy and to avoid ‘ surprises ’ that could trigger volatility in the money market. to strengthen policy effectiveness in this present age of disclosure, the central bank must also carry out a process of educating the public on what the monetary policy objectives are, the strategy for achieving these objectives, and what lies behind the decisions taken. one example involves the communication of the monetary policy response to soaring oil prices and risks from global imbalances at a time of weak conditions in the real sector and high unemployment. communications between the central bank and market players are also necessary, especially when financial markets are experiencing turbulence. in financial markets fraught with asymmetric information, the wealth of information held by the central bank is frequently of great benefit in mitigating this issue and thus preventing panic and herding by investors. in this regard, the credibility of the central bank is crucial. concluding remarks under the environment of financial integration, the task of

also declined somewhat in the recent period, albeit still remaining high. for further information about this issue, you can refer to the relevant box in our report. 6 / 12 bis - central bankers'speeches we envisage that our decisions will facilitate an improvement in inflation expectations, and the gap between market expectations and our interim targets will be closed. monetary policy distinguished participants, in this part of my speech, i would like to talk about our monetary policy strategy. as you know, we initiated a strong monetary tightening process in june 2023 to establish the disinflation course as soon as possible, to anchor inflation expectations, and to control the deterioration in pricing behavior. accordingly, we have raised the policy rate from 8. 5 percent to 50 percent. as a technical adjustment, we widened the interest rate corridor in march. in addition, against the divergence in expectations of economic units and possible volatilities, we continue to implement macroprudential policies to enhance the effectiveness of monetary transmission. accordingly, in order to support the rebalancing process in domestic demand, we lowered turkish lira commercial loan and general - purpose loan growth limits to 2 percent, we introduced reserve requirements and terminated securities maintenance practice. moreover, we raised the maximum interest rate on credit cards. in order to reinforce the monetary transmission mechanism and increase the share of turkish lira deposits, we started remunerating turkish lira required reserves according to targets and revised targets for growth of turkish lira deposit share. as of today, we completely terminated the securities maintenance practice in order to enhance the functionality of market mechanisms and strengthen macro - financial stability. thus, we were able to enhance the functionality of the bond market, normalize the yield curve and strengthen the monetary transmission mechanism. we have sterilized the excess liquidity stemming from the exchange rate difference payments of fx - protected accounts and the increase in the cbrt's swap transactions with domestic banks in the final quarter of 2023. more than 1 trillion turkish liras were sterilized from the market via the increases in required reserves. in december, we started holding turkish lira deposit buying auctions to sterilize access liquidity. we are sterilizing the temporary excess liquidity via deposit buying auctions. 7 / 12 bis - central bankers'speeches we will monitor liquidity conditions closely and we will effectively use necessary sterilization tools when necessary. our monetary tightening steps have immediate and strong effects on financial markets. in this part