Yield Curve*  2-Year Real Interest Rates for Turkey*  (Percent)  (Percent)  *Calculated from the compounded returns on bonds quoted at the ISE Bonds and Bills Market by using ENS method. Source: CBRT, ISE. * Calculated as the 2-year discounted bond returns derived from the yield curve, minus the 24month ahead CPI nflation expectations from the CBRT’s Survey of Expectations. Source: ISE, CBRT. BIS central bankers’ speeches  3  Market interest rates plummeted in the last quarter due to improved risk appetite besides the liquidity policies pursued by the CBRT. Meanwhile, the decline in long term rates proved more notable. As a consequence, yields shifted down across all maturities while the yield curve flattened in the interreporting period as illustrated in the slide (Chart 8). Real interest rates also plunged since the fall in nominal interest rates was more significant than that in inflation expectations. Although having crept up recently, real rates still stand at ever-low levels (Chart 9). Bank lending rates also remained on a downward track in the last quarter amid eased external financing conditions alongside our liquidity policy. Consumer loan rates maintained a downward trend in line with the market interest rates. Moreover, the fall in corporate loan rates became more significant in the final quarter of the year owing to the cuts in the upper bound of the corridor (Chart 10). What is more, tightening in the credit supply conditions for corporate lending receded in this period (Chart 11). Chart 10. Chart 11.
In addition to these forecasts, alternative scenarios on the inflation outlook and the global economy are discussed in the Risks section of the Inflation Report. You can examine the Report for details. While concluding my remarks, I would like to thank all my colleagues, who contributed to the Report, primarily those at the Research and Monetary Policy Department as well as the members of the Monetary Policy Committee, and thank every one of you for your participation. 10  BIS central bankers’ speeches