Meksika Polonya G.Afrika G.Kore Y.Zelanda Şili Macaristan Türkiye  1207  1.9  0.04  0907  2  900  0607  TL/Kur Sepeti (0,5 Euro+0,5 ABD Doları)  0308  2.1  Source: Bloomberg and CBRT. On the other hand, the currencies of emerging markets that implemented policy rate cuts of larger amounts also performed better in the second quarter of the year, as was the case during the entire process of the crisis. This owes its existence to the fact that changes in the risk premia of countries during the crisis are determinants of not only exchange rate performance but also monetary policy decisions of the said countries. As of the second quarter of the year, policy rate reductions have become partially influential on domestic credit markets. The marked decline in interest rates on loans extended to firms is particularly striking (Figure 18). This has reduced the cost of credits of firms with faltering cash flow, which they utilize to restructure their debts. Thereby, the deterioration in the  BIS Review 103/2009  11  financial structures of such firms was limited and a permanent damage to the production capacity of the economy was averted. Against the rapid decline in interest rates on loans extended to the corporate sector, fixed and long term loan interest rates still remain high. As a matter of fact, term premia in consumer loans are at relatively high levels and particularly the fall in interest rates on long term loans remains relatively limited (Figure 19).
Distinguished members of the Press and Esteemed Guests, Against this background, assuming that there is further easing in policy rates in the near term followed by no change until the end of 2010, medium-term forecasts suggest that, with 70 percent probability, inflation will be between 4.9 and 6.9 percent with a mid-point of 5.9 percent at the end of 2009, and between 3.7 and 6.9 percent with a mid-point of 5.3 percent at the end of 2010. Furthermore, inflation is expected to come down to 4.9 percent by the end of 2011 and to 4.8 percent by mid-2012 (Figure 26). Figure 26: Inflation and Output Gap Forecasts* (Percent)  Forecast Aralığı* Range * Tahmin  OutputAçığı Gap Çıktı  Band for 2009 2Uncertainty 009 için Belirsizlik Aralığı  Yıl SonuInflation Enflasyon Hedefleri Targets End-year  13 11  KontrolRange Ufku Control  9 7 Yüzde  5 %  3 1 -1 -3 -5 -7 -9 1  2  3 2009  4  1  2  3  4  2010  1  2 2011  3  4  1  2  2012  * Indicates a 70-percent confidence interval for the forecast. Revised forecasts indicate that even if policy rates are kept at low levels for an extended period, aggregate demand conditions will continue to underpin the disinflation process over the next two years. Forecasts also indicate that significant base effects may lead to some inflation volatility in the short term.