Unit Real Wage Index in Manufacturing Industry (1997=100)  125 115 105 95 85 75 65  05-III  05-I  04-III  04-I  03-III  03-I  02-III  02-I  01-III  01-I  00-III  00-I  99-III  99-I  98-III  98-I  55  Source: SPO, TURKSTAT and CBRT. In 2006, in the event investments and employment in the manufacturing industry follow the same course as the previous period, the continuance of productivity increases may be expected. Meanwhile, the salaries of civil servants and minimum wage increases point to a rise in wages above inflation. The unfavorable course in raw material prices, another significant component of costs, still persists. Crude oil prices exceeded their historical peak figure experienced during Hurricane Katrina by the 25th of April and reached USD 73.3 per barrel. OPEC’s decision to leave its quota unchanged at its meeting of the 8th of March, the low level of unused capacity in the sector and uncertainties about leading oil producing countries such as Nigeria and Iran led to an increase in oil prices. Despite new production capacities are expected to be introduced, the International Energy Agency’s (IEA) expectations for the growth trend in crude oil demand, which are above those of 2005, strengthen the probability that oil prices will remain high throughout 2006.
‘Other’ includes: Reserve Bank of Australia, Banco Central do Brasil, Danmarks Nationalbank, Bank of Korea, Banco de Mexico, Norges Bank, Reserve Bank of New Zealand, Monetary Authority of Singapore, and Sveriges Riksbank. This was just the scenario for which the swap lines had been designed. Put in place after the GFC, the standing swap lines allow five major central banks (The Bank of England, Bank of Japan, ECB, Swiss National Bank and Bank of Canada) to lend dollars to their local banks, confident in the knowledge that they can back those loans with dollars secured from the Federal Reserve, short-circuiting any market dysfunction. Most of the standing swap line central banks, including the Bank of England, provide weekly dollar auctions backed by the swap lines. But take up is usually minimal, because the auctions are intended only to be backstops when markets are working normally, and priced accordingly. But that was not the situation we faced in March. Over the days following that first call, as market conditions deteriorated further, we agreed on a package of measures to mobilise the swap lines more fully: extending the maturity, reducing the price, and increasing the frequency of our operations to ensure that dollars 5  All speeches are available online at www.bankofengland.co.uk/news/speeches  5  continued to flow. The first part of this package was announced on Sunday 15 March, and further extended on 20 March. The Federal Reserve also agreed temporary arrangements with a further nine central banks.