Stemming mostly from the lack of demand from China and other developing economies, this trend caused import prices in the Turkish economy to BIS central bankers’ speeches  7  recede in USD terms. Therefore, we made downward revisions to assumptions for crude oil prices and USD-denominated import prices With regard to annual averages, we reduced crude oil price assumptions from USD 54 to USD 37 for 2016. Also, we revised the assumptions for annual percentage changes in average import prices downwards by 4.9 points for 2016. We revised the assumed inflation for food prices upwards from 8 percent to 9 percent for 2016 due mostly to the effects of minimum wage adjustments on costs and demand (Chart 19). Chart 19. Revisions in Oil and Export Prices* Oil Prices* (USD/barrel)  * Shaded area indicates the forecast horizon. Source: Bloomberg, CBRT. Import Prices* (USD, 2010=100)  * Shaded area indicates the forecast horizon. Source: Bloomberg, CBRT. Effective as of January 2016, some items with administered prices saw price increases. We estimate that the additional effect on the year-end inflation of the portion of these increases that remain above 5 percent will be 0.4 points in 2016. In turn, we monitor meticulously how the rise in the minimum wage will affect the budget balance and tax adjustments.
We want our monetary and financial systems to be stable, not only throughout the economic cycle, but also across cycles. And what we also share is that we are still very much uncertain about how to achieve this goal perfectly. One, rather harsh expression of this uncertainty of ours, is the adage popular among some policy-makers. As financial stability is hardly a quantified (or maybe even quantifiable) goal, some in the community grumble that central banks targeting inflation are delivering price stability, while central banks targeting financial stability are delivering just financial stability reports. Yes, this is really a bit too strong statement, as we all know, explicitly or implicitly, that the banking sector faces a trilemma – or an impossible trinity of a kind, if you will. Banks can never be simultaneously: 1.  perfectly safe,  2.  perfectly efficient and  3.  always free of moral hazard  It is like in the area of public health care. This complex system also cannot simultaneously achieve three goals perfectly and be: 1.  cheap,  2.  of the highest quality and  3.  universally accessible to all without entry barriers  In the banking sector – like in the area of health care – we can either abandon one principle in order to achieve the remaining two more or less perfectly, or we have to balance all the three principles somehow, but all of them will be achieved and maintained only partially, imperfectly (and sometimes deeply imperfectly).