The Executive Board of the International Monetary Fund (IMF) has decided to allow the government of Turkey to withdraw one billion dollars from its stand-by credit account following its first review of the Republic’s performance under the three-year stand-by credit arrangement, reported an IMF statement.
The stand-by credit was approved in February in a total amount of $16 billion, of which Turkey has withdrawn nine billion dollars. “The authorities' efforts have been rewarded by a substantial decline in interest rates, a strong balance of payments position and an associated appreciation of the Turkish lira, and a drop in inflation and in inflation expectations,” said First Deputy Managing Director of the Board, Anne Krueger.
Despite these positive developments, Krueger added that risks still remain. The timing and strength of the recovery in output are as yet uncertain, and financial markets remain alert to the possibility of further shocks.
This is the third major aid program approved for Ankara in under two years. The credit was awarded in a bid to support Turkey's new three-year economic reform program, for 2002-2004.
The Turkish parliament approved a tight national budget for the year 2002 in early December, in line with the country’s reform pledges to the IMF. Nearly half of the budget’s $67-billion expenditures will be directed to interest payment. — (menareport.com)
© 2002 Mena Report (www.menareport.com)
