, we kept our oil price assumption constant at 44 usd for 2016, and increased it to 54 usd for 2017. on the food front, food inflation remained far below the level envisaged in the july inflation report due to unprocessed food inflation in the third quarter of 2016. taking account of the current trend of unprocessed food inflation as well as the decrease in the demand for food stemming from the fall in tourism revenues, food inflation, which we assumed to be 8 percent by end - 2016 in the july inflation report, was revised downwards to 6 percent. due to the ongoing weakness in food demand owing to the tourism sector that will persist in 2017 coupled with the measures taken by the food and agricultural products markets monitoring and evaluation committee ( the food committee ), we expect food inflation to be lower than its historical average in 2017 as well. accordingly, we revised our assumption for food inflation downwards from 8 percent to 7 percent for end - 2017. our medium - term forecasts are based on an outlook that adjustments to taxes and administered prices will be consistent with the inflation target and automatic pricing mechanisms. for medium - term fiscal policy stance, we use the mtp projections covering the 2017 – 2019 period. 3. inflation and the monetary policy outlook esteemed guests, now, i would like to present our inflation and output gap forecasts based on the outlook i have described so far. given a cautious policy stance that focuses on bringing inflation down, we estimate inflation to approach gradually to the 5 - percent target. inflation is likely to be 7. 5 percent in 2016, falling to 6. 5 percent in 2017 and stabilizing around 5 percent in 2018. accordingly, we expect inflation to be, with 70 percent probability, between 7 percent and 8 percent ( with a mid - point of 7. 5 percent ) at end - 2016 and between 5 percent and 8 percent ( with a mid - point of 6. 5 percent ) at end - 2017 ( chart 17 ). 8 / 10 bis central bankers'speeches the turkish lira fluctuated following the july inflation report, while oil prices increased. we revised our assumptions for tl - denominated import prices upwards for the upcoming period compared to the previous reporting period. on the other hand, we envisage that the latest domestic developments will curb domestic demand particularly in the short term. accordingly, we revised our output gap forecasts downwards. the year - end consumer inflation forecast for 2016 remained unchanged as downside effects and upside

be provided via one - week repo auctions, while the 2 / 10 bis central bankers'speeches share of our marginal funding decreased ( chart 4 ). our weighted average funding rate dropped to around 7. 8 percent in october. interbank overnight repo rates remained on the decline in line with the reductions in the upper band of the interest rate corridor. i would like to underline that our monetary policy stance will continue to depend on the inflation outlook in the upcoming period. as cbrt, we will maintain our cautious monetary policy stance by taking into account the developments regarding inflation expectations, the pricing behavior and other factors affecting inflation. amid continued expectations for a prolonged low interest rate environment across advanced economies as well as the favorable course of domestic macroeconomic indicators and monetary policy simplification, the yield curve shifted downwards in all maturities from the previous reporting period, as shown on the slide ( chart 5 ). the fall was more pronounced in short - term interest rates due to the decline in our funding rate. 3 / 10 bis central bankers'speeches the slide in the annual growth rate of loans extended to the non - financial sector came to a halt in the third quarter of 2016 owing to reduced tightness in monetary conditions, macroprudential measures that support the financial system and government incentives ( chart 6 ). commercial loans continued to grow faster than consumer loans in this period as well. although the gradual fall in our marginal funding rate partially passed through to loan and deposit rates, loan standards remained partially tight in the third quarter. however, i would like to state that consumer loans have recently rebounded on the back of the favorable effect of our liquidity policies on banks ’ domestic funding conditions and emerging effects of macroprudential policies ( chart 7 ). 2. macroeconomic developments and main assumptions 4 / 10 bis central bankers'speeches estemeed guests, now, i will talk about the macroeconomic outlook and our assumptions on which our forecasts are based. first, i will summarize the recent inflation developments. then, i will continue with the domestic and external demand outlook upon which we based our projections. consumer inflation ended the third quarter at 7. 28 percent, remaining consistent with the lower bound of the july inflation report forecast ( chart 8 ). the fall in inflation was mostly driven by prices of core goods and unprocessed food, whereas annual inflation in tobacco and energy was up. thus, inflation excluding unprocessed food and tobacco posted a smaller decline,