Turkey turns to G7, IMF and World Bank for financial aid

Published March 19th, 2001 - 02:00 GMT

Turkey's Economy Minister Kemal Dervis said Sunday, March 18, that he would discuss with representatives from the world's leading powers the need for foreign aid to tackle the country's severe economic crisis. Dervis told journalists here that he would meet with ambassadors from the Group of Seven industrial nations (G7) and officials from the International Monetary Fund (IMF) and World Bank Sunday to discuss Ankara's efforts to overhaul its battered economy. 


"I will also try to explain to them clearly within the framework of a consistent program that Turkey really needs a reasonable amount of foreign support quickly to overcome this financial mishap," Dervis added. He refused to elaborate on the amount of aid. 


In the face of a grave liquidity squeeze triggered by fears of political instability, the Turkish government last month abandoned a pegged exchange rate and floated the lira, in breach of a three-year IMF-backed anti-inflation plan in place since December 1999. Since then, the lira has lost around 30 percent against the dollar amid rising prices and prospects of extra budget expenditure. 


Dervis on Wednesday announced a series of priority measures, designed primarily to clean up Turkey's overcrowded and weak banking system, seen as the main source of financial woes. Officials have said Turkey will need foreign financial aid to implement the required reforms, particularly to cover the huge losses of three public banks. 


Turkish Prime Minister Bulent Ecevit on Friday called on the United States for aid to overcome economic difficulties and added that the European Union and G7—Britain, Canada, France, Germany, Italy, Japan and the United States—should also extend a helping hand. Turkey's financial officials are currently working to form a new economic programme with revised macro-economic targets and anti-inflation policy. 


Under the original IMF-backed program, Turkey was aiming to reduce inflation—which stood at 39 percent in 2000—to 12 percent at the end of the year, but officials have said the target will be revised upwards after the floatation of the lira. —(AFP)  


© Agence France Presse 2000  

© 2001 Mena Report (www.menareport.com)

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