Rift Over Grain Prices Shakes Turkey’s Government, Market

Published May 29th, 2001 - 02:00 GMT

A rift between Turkish ministers over grain prices Monday threatened to disrupt the government's International Monetary Fund (IMF)-backed economic program and gave markets the creeps over the future of the coalition government, reported Turkish Daily News (TDN).  

It said Economy Minister Kemal Dervis dashed out of the Monday cabinet meeting, after failing to agree with Agriculture Minister Husnu Yusuf Gokalp over wheat support prices, which is one of the key components of Turkey's deal with the IMF. The cabinet meeting was dissolved without resolution before the leaders of the three coalition parties met later in order to reach reconciliation.  

Consequently, shares on the Istanbul Stock Exchange (IMKB), which were already losing ground in the morning session, plunged deeper in red on the news and ended the day with an average loss of 6.16 percent. The IMKB national-100 index plummeted 737 points during the d ay to close at 11,231 points, said the daily.  

Dervis later on joined the leaders' summit on grain prices which were expected to be announced the same day. As of press time there was no statement although the summit has ended.  

The government has pledged in its letter of intent to the IMF that the margin for support price for wheat over world prices would be reduced to a maximum of 20 percent provided that support price increases wouldn't exceed the projected rate of inflation, according to TDN – Albawaba.com

© 2001 Al Bawaba (www.albawaba.com)


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