KEYNOTE ADDRESS BY SÜREYYA SERDENGEÇTİ,

GOVERNOR OF THE CENTRAL BANK OF THE REPUBLIC OF TURKEY,

DELIVERED AT THE PRESS CONFERENCE HELD ON THE OCCASION OF THE LAUNCHING OF THE

YTL PUBLICITY CAMPAIGN,

ANKARA, ON 23 SEPTEMBER 2004

Distinguished members of the press and dear guests,

We have now approximately three months before seeing the realization of our wish that we have long dreamt of. Welcome to the publicity conference held on the occasion of launching the information campaign for removing six zeroes from our currency. I salute you on my and my friends’ behalf.

Today’s presentation will be covered in two parts. In the first part, we will briefly talk about the meaning of changeover to YTL, its timing, the benefits of the changeover and what we have done so far. In the second part, we will present the details of the publicity campaign that has a critical role in the success of the changeover operation.

As known by all, as of January 1, 2005, six zeroes will be deleted from our currency and YTL (New Turkish Lira) will become the new currency unit of Turkey. In the New Year, we will start using the New Turkish Lira and the New Kurus.

The composition of denominations for YTL banknotes will be 1,5,10, 20,50 and 100 and denominations for coins will be 1,5,10, 25, 50 New Turkish Lira and 1 YTL.

While determining the name of our new currency unit, the expression of “Lira”, which is the unique currency unit traditionally used throughout the Republican period and identified with Turkey in international markets, has been preserved.

Other countries’ experiences have served as a blueprint for us. Many countries that dropped zeros from their currency units opted for adding the adjective “new” before the name of their currency units in order to facilitate the transition and omitted the word “new” after a while.

Changeover to New Turkish Lira is clear evidence that the vicious cycle that is believed to have trapped the Turkish economy has been broken at last. The New Turkish Lira is also a symbol of attaining a lasting economic stability, which have dreamed of for a long time and put great efforts. Therefore, as the changeover operation is crucially important with regard to its contribution to the country’s economy as well as to individual and social lives, it is a project in the national level.

The facts that urged transition to a new currency unit stand as proof of the importance of the issue.

The high inflationary process, which started in 1970s, obliged expression of economic values in terms of billions, trillions and even quadrillions. In this process, the cash demand of economy was met by new banknotes in larger denominations that were put into circulation almost every two years since 1981. As a result of this process, Turkey is currently the country, where the highest-denominated banknotes are circulated. This fact does not only undermine the reputation of our currency but also adversely affects the currency’s functions as a medium of exchange and store of value.

Removing six zeros from the currency coupled with the ongoing efforts to driving inflation down to single digit numbers is a very important step from the point of its effects on the reputation of our currency.

Meanwhile, deleting zeros from the currency will eliminate the technical as well as operational problems arising form the use of figures with multiple zeros. Therefore monetary expressions will be simplified and taking records and making transactions will become easier.

In sum, changeover to New Turkish Lira is necessary both for the prospective positive effects on the currency’s reputation and for technical reasons. The New Turkish Lira is also symbol and evidence of Turkey’s determination to drive down inflation.

Distinguished members of the press,

An analysis of the 49 countries that have dropped zeros from their currencies shows that changeover to new currency units have generally been accompanied with stability programs.

It is observed that in some countries, the changeover operations have been introduced only after seeing the positive effects of the stability programs on economic balances and inflation.

As the current stability programs have produced objectively positive effects generally on the economic balances and specifically on inflation figures and inflation is following a sustainable downward trend, January 2005 was deemed to be the most appropriate time for such an operation.

Considering the downward trend of inflation and the positive expectations regarding the future of economy, 2005 is very appropriate. So now is the time to remove zeros from TL!

We would like to emphasize several issues that the public needs to know about the transition to YTL:

With the transition to YTL on 01.01.2005, both TL and YTL will be in circulation for one year. Turkish citizens will be able to use both types of money as they do their shopping. However we plan a quick and complete transition to YTL and Yeni Kurus.

We expect that by the end of February 2005, almost 90-95 percent of the money in circulation will be YTL.

Meanwhile, since both currencies will be in circulation through the year, starting from 01.01.2005 it is a legal obligation to show the prices of goods and services both as TL and YTL on price tags and lists.

This application, enabling Turkish citizens to control prices, will minimize the inflationary pressure that may be caused by the rounding up of prices during the transition to YTL.

Dear guests,

Banknotes and coins currently in circulation will be withdrawn as of 01.01.2006. However, for 10 years, these TL banknotes will be exchanged by the Branches of the Central Bank. Ziraat Bankası will carry out this task at cities where Central Bank does not have branches.

At the second stage of the operation the expression “Yeni” (New) will be removed and the use of the expression “TL” will be resumed. The date of this change will be determined in the future according to the development of the operation and the overall situation of economy in our country.

I would also like to briefly mention the core benefits of dropping 6 zeros from our currency.

Zero removal stage coupled with the process of pulling down inflation to single digits is crucially important in terms of the prestige of our currency. Therefore, it is obvious that this operation will contribute to the prestige of our country in the international level as well.

With this operation the trust of people on our currency will be renewed; and this trust will create suitable socio-economic conditions for the continuation of the stabilization program.

To sum up in the EU integration process, the transition to New Turkish Lira is highly important in terms of the contribution it will make to the restoration of the prestige of our currency as well as in terms of the technical impacts it will bring about. Moreover, it is a historic step taken in the way of making a 30-year dream come true.

Members of the press,

There is a three-month period a head of us for finalizing the technical preparations at the micro level. Within this period all institutions and agencies, both public and private, are expected to complete necessary preparations.

Primarily the institutions authorized to do regulations under the Law 5083, all related public and private institutions continue their preparations for the transition to YTL as planned.

YTL banknotes are being printed. Printing and distribution to the branches of the Bank continues. The General Directorate of the Turkish State Mint and Printing Plant will mint 1 billion 200 million coins by 31.12.2004.

Studies regulating the collection and payment processes of Central Bank branches are still continuing.

The adjustments in EFTS/ TIC-ESTS are concluded and came to the start of a test phase. The mentioned tests are expected to be completed at the end of November.

It is planned that YTL banknotes and coins are sent to banks before January 1, 2005.

In order to adjust the note counters and currency verifiers to the new currency, YTL banknotes will be submitted to the related firms under confidential agreements as of October.

All TL accounts will be converted to YTL in January 1, 2005 and kuruş-based changes will be reflected on accounts.

IT Technologies Sub-committee, which is established within the Supreme Committee for YTL, coordinated the preparations of the related institutions for the conversion of their software to YTL. In the meetings with software houses, which prepare software for small and medium-sized enterprises, the IT Technologies Sub-committee answered questions on the conversion to YTL and initiated the conversion activities in these software houses.

The Ministry of Finance carries out studies on the conversion to YTL, regarding its own missionary fields. The Ministry published a communiqué on the utilization of payment recording devices in the Official Gazette. With another amendment in the law, tax- payers are given the opportunity to declare all of their payments on payment recording devices as expense with a hundred percent depreciation rate.

Moreover, draft of “the Communiqué on the Principles to be Applied by Enterprises Regarding Special Accounting System in the Utilization of YTL” is announced on the Bank’s website.

The Ministry of Industry and Trade prepared an amendment bill in order to ease the probable concerns in the Turkish Trade Law, regarding the conversion of the minimum nominal value of the stocks of a joint stock corporation and the utilization of partnership rights, and to adjust these values to the new currency. The mentioned bill is sent to the Turkish National Assembly, after consultation to the related institutions.

Meanwhile, a circular is sent to the Province Directorates of Industry and Trade in order to announce the obligatory dual labeling to the sellers and vendors, who offer wholesale goods and services in the market.

The Undersecretariat of Treasury carries out the preparation activities regarding SEE’s coordination duty in YTL preparation activities and other matters concerning its own missionary field.

Capital Markets Authority adopted the necessary regulations with Istanbul Stock Exchange in order to handle the problems, which may emerge in Istanbul Stock Exchange markets. Transactions will cease in Istanbul Stock Exchange Market in December 30 and 31, 2004 in order to prevent any unfavorable conditions, which may come into being during the exchange operations and to help the stock exchange members to conduct the annual closing operations effectively. Hence, transition to YTL will occur in a stable environment, without an exchange operation remaining from 2004 and all records will be converted to YTL. Capital Markets Authority continues the YTL preparation activities on the matters concerning its own missionary field.

Banks and Special Finance Institutions also work under a Supreme Board established for the transition to YTL. Sub-working groups, which were formed within the Banks Association of Turkey, carry out YTL preparation activities at a great speed with the continuous support of the Central Bank and BRSA.

To sum up, all the activities to be carried out in the public sector continue consistently with the plans.

The reasons that I have mentioned before and the changes, which will be caused by the transition to YTL, demonstrate the national side of this project. Turkey sacrificed for many years in order to break the vicious circle, which imprisoned the country. Today, Turkey has a chance to break it. For this reason, no one can be indifferent towards this project.

All technical preparations should be fully completed in order to minimize the problems, which may emerge during the transition to YTL. Moreover, the communication activities that will be carried out to shorten the harmonization process of Turkish people to YTL and to minimize the problems, which may emerge during transition to YTL, bear much significance.

For this reason, the communication activities aiming at the introduction of YTL and public information campaigns are planned very carefully. The most important step is made towards the campaign with this meeting.

Distinguished guests,

Communication campaign has been planned so that the transition to New Turkish Lira and the adaptation of the people to this new process are accomplished as soon as possible. In this framework, the campaign essentially aims at informing the public, gaining the support of the society for this implementation and giving pace to the transition process.

In the planning stage of the campaign, the primary target audience has been determined as those citizens who are relatively unreceptive to communication, unable to take advantage of the opportunities of technology, who are at or above the age of 60 and illiterate and live in rural areas. A campaign that achieves to reach that audience will be deemed to have achieved the target.

The main targets of the campaign can be summarized as follows:

-To create awareness throughout the country and in our citizens living abroad on the transition to the use of New Turkish Lira and New Turkish Kurus as of January 1, 2005,

- To inform the public about the problems that the transition to New Turkish Lira might bring about in the implementation stage and to cognitively and psychologically prepare the public for the operation,

- To introduce the physical images and security features of New Turkish Lira banknotes and coins and thus reduce the likely concerns,

- To create awareness about the double-price labeling obligation and raise consciousness in our citizens on this issue,

- To ensure that the New Turkish Lira is perceived as a symbol of a new stabilization period in the economy as well as a symbol of a dependable future,

- And moreover, to point out that the transition to New Turkish Lira is a historic turning point in restoring the prestige of our currency and our country in the international arena.

Thus, the campaign plan has been prepared by taking into account the responsibilities of informing the public and raising consciousness.

In this framework, our communicative approach has been shaped according to the fact that the public awareness should be raised on a confidence base.

Communication campaign has been planned with utmost care to ensure that all its stages are informative, supportive of change, clear and transparent, simple and explicit, participatory and sharing in a way to let a synergy be established with diverse sections of the society.

In this context, effective cooperation with public enterprises, business as well as labor world and non-governmental organizations have been envisaged in order to strengthen the effectiveness of the communication campaign, to extend the campaign to various sections of the society and to make them internalize the campaign.

In the planning stage of the campaign, it was aimed to reach the citizens through different channels rather than a single one.

In addition, the campaign extends to the Turkish Republic of Northern Cyprus and other foreign countries where intense populations of our citizens live as well.

Esteemed guests,

The communication campaign has been planned to consist of three stages. The first stage has taken start as of today.

This stage will continue until the date the physical images and security features of new banknotes and coins will start to be introduced. The start of these introductions is planned to take place most probably in October.

Prior to the first stage, corporate identity of the campaign has been formed. In this framework, introductory materials to be used in the first stage have been supplied. Preparations for TV films and radio spots have been completed.

Moreover; introductory booklets including the fundamental information about New Turkish Lira, posters, stickers with campaign’s logo on and pocket calendars with calculation facilities on one side will be used in this stage as well.

We will cooperate with certain sectors, and especially the public institutions, to ensure their contribution to the YTL publicity campaign and to act together. We hope for increased contribution from the private sector organizations to this process.

As periodically echoed by yourselves, the information campaign, carried out by the participation of the representatives from the Central Bank and other institutions and agencies in the vocational and regional meetings, continues.

It is envisaged that, linked to the cooperation with the media organizations, the broadcast of publicity tapes and advertisements at the TV channels, as well as radio spots will begin, together with the publishing of newspaper ads.

Distinguished members of the press,

The basic target of the second phase of our campaign will be to introduce the physical appearance of the new banknotes and coins, as well as their security features and conveniences for calculation.

In the second phase, along with the publicity campaign, action to bring about awareness towards dual labeling will come to the forefront.

At this stage, 1 million brochures will be printed, to introduce to the general public the physical appearance of the new Lira and its security features. Besides, 1 million brochures will be prepared specifically for the children, and with the cooperation of the Ministry of National Education, these brochures will be distributed at schools. Brochures with special printing will be prepared for the visually impaired. Billboards introducing the physical appearance and security features of the new Lira will be printed. Moreover, special billboards directed to double labeling will be prepared.

In addition, taking into consideration the problems likely to be encountered by the foreigners visiting Turkey, a book introducing YTL will be prepared in four different languages, together with Turkish-English billboards, and these will be distributed to the travel spots abroad and in Turkey, to the representative offices of Turkey abroad, to touristic venues, and to other central banks.

The publicity campaign will continue at this stage, with the cooperation of public institutions, the private sector and the non-governmental organizations (NGOs). Our continuous endeavors towards education, which we believe to be of paramount importance in the successful completion of this process, will go on.

Furthermore, the promotion campaign will continue in TV, newspapers and radio stations in an uninterrupted fashion; and the issue will be kept on the agenda by way of news coverage.

Distinguished members of the Turkish press,

The third phase of our campaign will begin just before the New Year and go on until the habit of using the New Turkish Lira is established. The priority target at this stage is to cause excitement together with the New Year in the transition to the New Turkish Lira, and also to emphasize on the awareness-building studies to facilitate the daily use of the new banknotes and coins.

The emphasis on double-price labeling will continue at this stage. Cooperation with public institutions, the private sector and non-governmental organizations (NGOs) will proceed, just as the media news studies and the publicity work in TV, newspapers and the radio.

The overall print figure for the printed publicity material planned to be used in the campaign is as follows:

- 400 thousand publicity books

- 700 thousand billboards

- 2 million brochures

- 500 thousand tags

- 1 million pocket calendars

- 50 thousand publicity books in foreign languages

- 10 thousand Turkish-English billboards

- 5 thousand publicity books for the visually impaired

The publicity material will be reprinted as needed and/or as demanded.

Distinguished guests,

Now I would like to share with you the information relating to some of the written and visual publicity material we will be using in all these communication work.

We expressed the importance and meaning of transition to the New Turkish Lira for Turkey at the outset. This transformation is a proud, historical moment for our country that needs to be celebrated. Within this framework, we determined the campaign slogan to be “Long Live New Turkish Lira!.”

The campaign logo was based on this slogan. As a symbol of dropping six zeros from Turkish Lira, we say good-bye to the zeros in the 1 million. This logo will take place in all the communication work related to the publicity of the New Turkish Lira.

We carried logo to the forefront at our initial billboard as well. With the zeros flying away, we give the good news of YTL. We also included at the billboard some basic information, such as YTL and YKr will begin to be used from 1 January 2005 onwards and that six zeros will be dropped from Lira.

Our information booklets will be printed in 400 thousand copies and distributed throughout the publicity campaign. The booklet will cover basic information about New Turkish Lira. The information will be presented in question-answer format and the language used in the booklet will be simple and comprehensible. The booklet will be distributed in all parts of Turkey.

Meanwhile, a special website has been designed for the New Turkish Lira within the framework of the publicity campaign. The website provides all kinds of information and documents about the New Turkish Lira that might be sought for. This website will be operating in coordination with www.ytl.gen.tr, which is the joint website of public bodies working on YTL.

Anyone visiting the website will be able to find answers to his questions about YTL. Moreover, information about the publicity activities will be accesible through the campaign website linked to www.ytl.gen.tr.

Dear Guests,

Cooperation with public institutions constitutes one of the most essential pillars of a communications campaign.

We have conducted a series of talks with the representatives of various institutions until now. During these negotiations, our common expectations and demands from all public institutions were as follows:

- To inform their own staff about YTL,

- To give support in informing Turkish citizens about YTL to whom they provide service,

- To ensure that the promotion campaign materials are delivered to their sub-units,

- To display audio-visual materials of the campaign at all their buildings open to public,

- To provide a link from their internet sites to the web site address www.ytl.gen.tr,

- To publish informative articles on YTL in their institutional publications,

- To initiate as soon as possible the practice of double price labeling in their service units.

In this framework, negotiations have been conducted with various public institutions and their support has been ensured.

Moreover, the Ministry of National Education and the Ministry of Health have announced that they will offer all and any kind of support for distribution of promotion campaign materials to their related institutions and organizations. Thanks to their support, we will have the opportunity to promote YTL to teachers and students in all schools directly. We will convey the campaign to our citizens through all health units.

Furthermore, we will carry out an efficient communication campaign at train stations and on trains with the support of the Turkish State Railways.

Moreover, along with these general demands, we are planning specific cooperation to obtain the support of public institutions within the framework of YTL Publicity Campaign. Concrete steps have been taken towards some of these cooperation plans. In this context, we will make cooperation with various public institutions specific to their responsibility areas.

With the support of the Ministry of National Education;

- Informing teachers and students about YTL,

- Dissemination of any and all kinds of promotion campaign materials to teachers and students will be ensured.

With the cooperation of the Department of Religious Affairs;

- YTL will be publicized during Friday sermons and information will be provided about double pricing on labels.

With the support of PTT;

- Envelopes and cargo packages will bear campaign visuals.

In the mean time, I want to make an announcement with the permission of National Lottery Administration. The 2005 New Year Special Lottery Tickets will be issued with New Turkish Lira campaign design.

We thank to National Lottery Administration officials and all other public and private sector institutions for their great and meaningful support to our campaign.

Similarly, our talks with various public institutions for making cooperation specific to their responsibility areas are still continuing. We are going to share the related developments with you and the general public in the coming days.

Dear guests,

I have taken your time a lot. I have emphasized that the switch to New Turkish Lira is a multi-dimensional and national project. There is no need to reiterate how significant and historical step this project is for Turkey. The adoption of YTL by our people is of crucial importance for taking this step successfully, which will affect our lives deeply – from 7 years old to 70 years old, man-woman, peasant–city dwellers alike without exception.

We need everybody’s attention, contribution and support for the accomplishment of this operation. We invite private sector, non-governmental organizations and media to offer their active support to the campaign and to mobilize all their facilities for the sake of safe transition to YTL.

Businessmen should undertake the mission of promoting YTL to their staff, while professional and non-governmantal organizations to their members and media to whole Turkey. As the Central Bank, we are ready to provide them with any and all kinds of informative and documentary support.

Yes… A dream is coming true and we are experiencing this historical transition together. Come and take part in this achievement!..

While ending my remarks, I present my respects and thank you once more for your participation.