An International Monetary Fund (IMF) mission began talks in Ankara Friday on an austerity program hammered out with Turkey, a day after the Turkish privatization minister resigned over comments he had made on the plan, reported AFP.
The IMF delegation has around 10 days to examine progress made by Turkish authorities on structural reforms needed to haul the economy out of a financial crisis which seized the country in February, AFP quoted the Anatolia news agency as saying.
The IMF agreed on May 15 to a multi-billion dollar funding package for Turkey, and the panel led by Finn Juha Kahkonen is to decide whether to approve payment of a first tranche of $1.6 billion (1.9 billion euros) in June.
The Turkish lira has lost around 40 percent of its value against the dollar since the country floated the currency on February 22 after Ankara was forced to abandon an IMF inflation-busting plan.
On Thursday, Privatization Minister Yuksel Yalova resigned after comments he made on the IMF austerity program sent panic through the stock market.
According to Turkish Daily Star on Friday, Turkish financial markets tumbled after statements made by the cabinet member, which shook confidence in the coalition's commitment to the program backed by international loans.
The paper said the stock exchange tumbled more than 5 percent and the lira slipped around 4 percent Thursday morning following Yalova's announcement that he wouldn't sign a law liberalizing the tobacco sector, which is among the key legislative measures that will pave the way for fresh funding from the IMF and the World Bank.
"Whoever signed that letter of intent has the responsibility," Yalova said, adding that he couldn't rush such an important issue as the tobacco law, which concerns 600,000 people. The government had pledged to pass the law by end-May as a condition for the eighth review of the IMF. Another $600 million from the World Bank is tied to the passage of the same law.
World Bank Turkey director Ajay Chhibber was quoted by the daily as warning on Thursday that delay in the passage of reform legislation would put off the bank's loans and cost Turkey dearly.
The tobacco law is the only point of contention in Turkey related to the completion of farm reform loan talks, Chhibber told the Turkish Daily News earlier this month.
Markets have been slipping since the beginning of the week amid a lack of confidence and concerns that the government would fail to deliver on its promises to the two international lenders and spark another financial crisis, while the economy continues to suffer in the aftermath of two similar crises, said the daily – Albawaba.com
© 2001 Al Bawaba (www.albawaba.com)
