impossible to benefit from past experience in gauging the impact of recent global monetary policy measures on economic activity and other fundamental variables. although not having resorted to explicit quantitative easing in the post - crisis period eliminates some of the risks in case of turkey, it should still be noted that the full impact of the cumulative easing of 1000 basis points since november 2008 is yet to be seen. in other words, although the baseline scenario does not envisage any policy rate hikes for an extended period, it is important to closely monitor the impact of policies to ensure a timely response to any development not envisaged within the framework i drew in my assessments above. another possible scenario is a surge in capital inflows to emerging markets owing to the relative improvement of credit risk across these countries. ample liquidity with low cost driven by expansionary fiscal and monetary policies on a worldwide scale, coupled with rising risk appetite, have led to an increase in the demand for financial assets of emerging markets. current low levels of resource utilization in the turkish economy imply that a fall in the cost of imported inputs may be reflected on to the consumer prices rapidly, suggesting that a further acceleration in capital inflows may exacerbate downward risks on inflation. the realization of such a scenario may lead to temporarily lower policy rates compared to those envisaged in the baseline scenario. esteemed guests, the cbrt will continue to monitor fiscal policy developments closely while formulating monetary policy. enhancing the framework set out in the medium term program ( mtp ) through further structural adjustments to strengthen fiscal discipline will support the relative improvement of turkey ’ s sovereign risk. should the goals set out in the mtp are achieved we consider that it may be possible to keep policy rates in single digits throughout the forecast horizon. increasing budget deficits worldwide continue to pose upside risks to inflation expectations and thus to global market interest rates in the long term. our medium - term inflation and monetary policy outlook envisage that recovery in global economic activity follows a slow and protracted course, while saving rates keep rising and global interest rates remain at low levels for an extended period. however, huge budget deficits particularly in developed countries, which are triggered by fiscal stimulus packages adopted in the face of the global financial crisis, besides the lack of a clear exit strategy from these policies, create upside risks regarding medium - term global interest rates. countries with relatively sounder banking systems and prudent fiscal policies would be more resilient against these risks

to commodity prices, mostly to those of crude oil and food, in our latest inflation reports. as a matter of fact, nearly half of the revisions about official inflation forecasts published in our inflation reports in the last couple of years originated from the changes in our assumptions about food and commodity prices. this suggests that the rise in commodity prices may bring about challenges for central banks not only in terms of direct pressures on inflation. the uncertainties due to commodity price fluctuations also stand out as an important issue for the monetary policy communication and expectations management by the central banks. structure of the commodity price dynamics is also of great importance for they constitute an input for the monetary policy decisions of the central banks. for example, the sources of the commodity price fluctuations and the nature of the shocks are extremely influential for the determination of the policy responses to these fluctuations. similarly, not only the level but also the volatility of commodity prices can have a significant effect on the macroeconomic activity. for example, a shock affecting the level of crude oil prices may have a different effect on economy, if it is observed in a period where the volatility of prices is also higher. bis central bankers ’ speeches inflation iv iii growth i ii as i have briefly mentioned before, an increase in the commodity prices creates downward pressure on the growth prospects, and upward pressure on inflation. in turkey, the investment incentive package that was announced yesterday will support our economic growth through the supply side, and the tighter monetary policy will eliminate the inflation risks. the sessions on each day of the conference will provide platforms for studies which are of very rich content and great potential benefit for policymakers. for example, macroeconomic effects of the commodity price dynamics and possible corresponding policy responses are among the main themes elaborated during the conference. another important issue to be discussed is how the effects of commodity prices on inflation, economic activity and exchange rates differ with respect to different monetary policy regimes. another important issue is the interaction among different economic policies vis - a - vis the commodity price fluctuations. distinguished guests, studies included in the program will substantially contribute to the understanding of the commodity price dynamics and the policy responses against the macroeconomic effects of these dynamics. in this context, i would like to thank the organization committee for their efforts for this conference program which gathers very interesting and enlightening studies. i also believe that the conference will provide a platform which will be highly beneficial for the exchange of views among participants. thank you very much in advance to all participants for their