For example, it appears easier for companies to fund themselves directly in the markets. When will the central banks and government phase out their support measures? The extensive measures taken by governments and central banks around the world to counteract the effects of the crisis have contributed strong economic stimulation. But in many countries some of the measures, however necessary they may have been, have led to much poorer government finances. In countries such as the United Kingdom, Ireland, Spain, Greece and the United States public finances are under great strain, for various reasons. This means, for instance, that there is a risk that the long-term interest rates in these countries will rise quickly, which to some extent has already happened. This in turn can hamper the economic recovery. Sooner or later it is also necessary to do something about the budget deficits. This is a cause for concern and we are expecting that such measures will hold back GDP growth abroad somewhat at the end of the forecast period. Most central banks which have managed the more acute phase of the crisis with the aid of various support measures and very low interest rates, are now in a phase where it is time to think about exit strategies and to return to more normal interest rate levels. At present the Riksbank is lending almost SEK 370 billion to the banks, and around SEK 295 billion of this  BIS Review 25/2010  3  is in fixed-rate loans.
We decided to target the Consumer Price Index (CPI). It is an indicator easily followed by all economic agents and is an effective way of accurately measuring the cost of daily life. However, we also announced that because the CPI is affected easily by several disturbances that are not under the control of monetary policy, several core inflation indicators will also be monitored closely. We set the inflation target as a “point target” and at the same time, we set a three-year time horizon for year-end targets. The year-end targets for 2006, 2007 and 2008 are 5 percent, 4 percent and 4 percent, respectively. Bearing in mind the transition from 2006 onwards to a three-year government  4  BIS Review 19/2006  budget practice, the announcement of a three-year target path is expected to increase the internal consistency of inflation targets and their harmony with other macroeconomic projections. We defined plus and minus two-percentage points around the target as an uncertainty interval. We thought that measured by a comprehensive index such as the CPI on one side and data and model uncertainty in the economy on the other side, it is not possible for the Central Bank of Turkey to ensure that inflation will not deviate more or less from the point targets.