Turkish President Ahmet Necdet Sezer signed last week a banking reform law which should lead to closing the loss-making state bank Emlak, crucial to the release of $1.5 billion in IMF funds. "The president has approved the law on banking institutions," a statement from his press office said.
Earlier in the day, International Monetary Fund (IMF) director Horst Koehler said in Washington that a meeting on Tuesday of the board of directors to consider aid for Turkey's economic reform program had been postponed.
"Against a background of generally good implementation of the economic program of the Turkish government, including passage of a remarkable number of key legislative measures, a few prior actions that were to have been implemented by the time of the Board review have not yet been carried out." Koehler said.
”These include several actions relating to the banking system, which we hope could be put in place soon."
The board meeting was expected to approve the release of $1.5 billion (1.8 billion euros) in IMF aid to Turkey, from a total aid package of $8 billion.
On Sunday, Turkish Prime Minister Bulent Ecevit said the IMF had expressed concern over a possible delay in approval of the key banking bill.
Turkey is bound under an agreement with the fund to continue implementing reforms aimed at restructuring its ailing economy by curtailing public spending, reducing inflation, accelerating privatizations and reforming the banking sector.
In order to overcome a grave cash crunch, Turkey floated the currency in February, causing the Turkish lira to lose about 40 percent of its value against the dollar and disrupting an IMF-backed anti-inflation plan in place since December 1999.
Emlak Bank and two other state banks have run up around $20 billion in losses. — (AFP)
© Agence France Presse
© 2001 Mena Report (www.menareport.com)
