Turkey is to introduce new measures to reform its ailing banking system, which was at the root of crisis and flotation of the lira last month, Turkish Prime Minister Bulent Ecevit said in remarks published in the press on Thursday, March 8.
"It has become apparent with the crisis that current practices are not sufficient to resolve problems in the sector and that new measures are needed," Ecevit said during a meeting with the Ankara representatives of the biggest newspapers. "It is essential that problems in the banking, and more generally the finance, sectors are resolved with urgency," Ecevit added.
The prime minister did not provide details of the new measures.
On February 22, Ecevit's three-way coalition scrapped a pegged exchange rate and let the lira free after a liquidity squeeze, triggered by fears of political instability, had wreaked havoc on the markets.
The flotation of the lira, which saw the currency plunge around 30 percent against the dollar, broke the backbone of an ambitious anti-inflation drive backed by a three-year, $4 billion loan from the International Monetary Fund (IMF).
The government is now preparing a new program with revised macro-economic targets and anti-inflation policy. "We need to prepare the new program quickly. Even though there will be a lapse in the coming few months, slashing inflation will remain the most important target of the program," Ecevit said.
Turkey was originally planning to cut inflation, which was running at a rate of 33.4 percent in February, to 12 percent at the end of the year. But authorities have said that the financial crisis would force the government to revise its year-end inflation target up to around 20-25 percent. —(AFP)
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