##ness of institutions. in the broader sense, we could conclude that strengthening market discipline within a clear prudential framework can help achieve a better balance between financial system stability and economic efficiency. in that sense, as the central bank, we are very well aware of our responsibility in implementing sound and coherent policies and delivering these policies and policy related messages to the markets within the context of maximum transparency and timeliness. all these components contribute to financial security and in turn enhance the financial stability in the system, accommodating policy makers ’ further decisions. actually, financial security and stability are so much interrelated that one could easily argue that the stability is also a prerequisite for the security in the system or vice - versa. lastly, financial security and thus, stability contributes to the health of the financial systems, efficient allocation of resources and effective management and distribution of risks in the economy. maintaining and safeguarding financial stability is a must for the authorities of every country not only to have a sound national financial system but also to contribute to the overall soundness of the world financial markets. policy coordination between institutions on international and national levels will certainly be the most important aspect of this dynamic process. thank you for your attention.

summarize the decisions that we have made within the new policy strategy. the downtrend in inflation during the last quarter of 2010 allowed the cbrt to give relatively more weight to financial stability during this period. in this respect, in order to reduce short - term capital inflows, we lowered policy rates on one hand and raised the volatility in short - term interest rates by widening the interest rate corridor on the other hand. moreover, in order to slow down credit expansion, we increased required reserve ratios ( chart 2 ). meanwhile, in order to enhance financial stability by extending maturity of the banking sector liabilities, we differentiated reserve requirements across maturities, with higher reserve requirements for short - term liabilities. these measures led to a fall in net short - term capital inflows, stopped the acceleration of credit growth and extended maturities for deposits. chart 2. cbrt policy mix cbrt policy rates tl required reserve ratios ( percent ) ( percent ) source : cbrt. source : cbrt. in the first quarter of 2011, both the faster - than - expected increases in oil prices and the robust domestic demand required a more cautious stance regarding the inflation outlook. specifically, oil prices hovering significantly above our january inflation report ’ s assumptions led to an increase in cost pressures. moreover, the ongoing rapid growth in private consumption and private investment spending added to the need to contain domestic demand in order to avoid secondary effects of the increases in oil and other commodity prices. notwithstanding historically low inflation at 4 percent in the first quarter, i would like to emphasize that we have acted with a medium - term perspective and started to highlight the upside risks to inflation since february. accordingly, in order to eliminate the risk of deterioration in general pricing behavior, we have adopted a stronger monetary tightening than was envisaged in the january inflation report ’ s baseline scenario. accordingly, the policy rate has been kept constant since february, while the weighted average of reserve requirement ratios for turkish lira liabilities was hiked by 410 basis points in march and april bis central bankers ’ speeches ( table 1 ). meanwhile, in april, fx reserve requirement ratios were differentiated by maturity where short - term fx reserve requirement ratios were increased slightly. thus, the policy mix composed of policy rates and reserve requirement ratios has been adjusted to deliver a monetary tightening, implying a more cautious monetary stance ( chart 2 ). table 1. weighted average of tl and fx required reserve ratios ( percent ) decision date tl