Turkish Finance Minister Sumer Oral sought to soothe financial markets on Tuesday, February 27, saying that the government has the economy under control and is working on changes to an IMF-backed disinflation program.
Markets are still uneasy over the effects of an economic crisis, which sent the lira plunging, but Oral did not provide any timetable for the new plan. "The government is in control of the situation. The financial picture is returning to normal with each passing day," Oral said, quoted by the Anatolia news agency. "Everything will calm down in fairly soon," he added.
Oral's remarks were seen as an attempt to inject confidence into financial markets after the government abandoned a key currency peg and floated the Turkish lira on Thursday, breaking the centerpiece of the plan backed by the IMF.
Deputy Prime Minister Devlet Bahceli said on Tuesday that Turkey should introduce measures to remedy the devastating effects of the crisis while sticking firmly to its aim of slashing chronic inflation. "It has become an absolute must to introduce a repair package and ease tension on the markets," he told his deputies in parliament.
Since being allowed to float, the lira has tumbled by 31.2 percent, falling from 689.000 against the dollar on Thursday to 1,001,810 on Tuesday.
"Our priority today is to normalize the financial markets and re-establish the balances. Turkey is doing just that," Oral asserted, urging the public not to panic. He said that work was already underway to revise targets in an ambitious economic program backed by a three-year, four-billion-dollar stand-by deal with the International Monetary Fund.
"A technical delegation is working on how macroeconomic balances will be reshaped following the recent incidents. Once the work is complete, the necessary measures will be implemented, the minister said. He did not specify a date for the introduction of new measures.
The abandonment of the currency peg was a severe blow to Ankara's anti-inflation program put into force in December 1999, and strengthened after a crisis at the end of November, experts say.
Two delegations from the IMF and two delegations from the World Bank are holding talks with Turkish officials in Ankara to outline ways of putting the economy back on track, looking at changes to the economic program and at reforms to strengthen the strained banking sector.
Experts have warned that the change in Ankara's monetary policy would result in rising prices, slowing economic growth, increased debt repayments and serious damage to its overcrowded and weak banking sector. — (AFP, Ankara)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)
