Turkey will complete work later Monday, April 30, on an economic reform package that has won a promise of $10 billion in IMF backing, Economy Minister Kemal Dervis said here. The Turkish government would then send a letter of intent outlining its reform commitments to the International Monetary Fund, he told a news conference at the Turkish embassy here.
"Today we will finalize the last details and the letter of intent may be ready tonight," Dervis said. "I do believe that the Turkish program is really strong," he added. The Turkish economy minister said he expected close to $5.5 billion of IMF and World Bank funding to be disbursed by the end of June.
The IMF on Friday said it had reached an agreement in principle to provide an additional $10 billion in IMF and World Bank assistance to Turkey to help it overcome an acute financial crisis. The aid would be contingent on Ankara's commitment to certain economic reforms. Turkey was the beneficiary of an $11 billion economic program in December.
But a widespread loss of confidence in the government's economic management then led to an exodus of funds and forced Ankara to abandon a crawling peg between the Turkish lira and the dollar on February 22.
The ensuing depreciation of the currency and the resulting price pressures upset the basis of the previous IMF-agreed anti-inflation program and forced Turkey back into the Fund's arms.
But the decision to hand out more money to Turkey won the unanimous support of IMF finance ministers, IMF managing director Horst Koehler told a news conference here Sunday. There was a good chance that, "based upon an open economy, an openness to the international economy, this government will get out of the mess," the Fund boss said.
"This program with the $10 billion financing is the right answer to the specific situation of Turkey." The eventual success of the economic reforms would be the responsibility of Turkey, Koehler said. "We put our contribution to it, so that it can really succeed." —(AFP)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)