Turkey won a promise of continued support from 30 international banks Monday as it struggled to recover from financial turmoil with the help of an IMF rescue package.
Turkish central bank governor Gazi Ercel and IMF officials met representatives of major European banks, along with the US bank Citibank, they said in a joint statement.
The bank representatives, all involved with Turkey, expressed "their intention to maintain support for Turkey," while welcoming the country's plans to restructure its banking sector, the statement said.
A similar meeting was scheduled with US banks in New York on Wednesday, it said.
Turkey ran into the arms of the International Monetary Fund (IMF) after suffering a severe liquidity squeeze.
The cash crisis had wreaked havoc on the money markets and led to emergency injections of funds by the central bank, record interest rates and a slump on the stock exchange.
"I am delighted with the strong show of support from the international community and the constructive attitude of the meeting," the Turkish central bank chief was quoted as saying.
"This will help us to make progress in restructuring the Turkish economy," he added.
Western banks had an exposure to Turkey totaling 42.252 billion dollars (48 billion Euros) at the end of June, according to figures from the Bank for International Settlements (BIS).
Germany's banks were at the top of the list with an exposure to Turkey of 11.36 billion dollars, followed by the United States with 4.4 billion dollars, France with 3.6 billion dollars and Britain with 2.2 billion dollars.
The Frankfurt meeting was organized by Deutsche Bank at the request of the Turkish monetary authorities. A source close to the negotiations said all the major European banks were present, although a list was not provided.
The message of support from the banks had little impact on the Istanbul stock market, where the main national index fell 46 points, or 0.5 percent, to close at 9,754.
"The markets are expecting not pledges but concrete action," Bank Express dealer Ziya Anildi told AFP in Istanbul.
"We can talk of improvement if foreigners put foreign currency into the central bank and start buying shares," he said, adding that this would also help pull down interest rates.
Turkish authorities planned to ask western creditors to renew short-term credit lines to cope with the liquidity crisis, the Germany newspaper Handelsblatt reported here.
IMF deputy managing director Stanley Fisher was to present the banks with details of a 10-billion-dollar (11-billion-Euro) IMF rescue package agreed with Turkey last week, it said.
Turkish Prime Minister Bulent Ecevit announced on December 6 the emergency IMF deal, which included 7.5 billion dollars in emergency funds and 2.9 billion dollars under an existing stand-by deal with the IMF.
In return for the lifeline, Turkey agreed to speed reforms, especially in the overcrowded bank sector.
Ankara also agreed to speed up privatization, a long-delayed condition of a four-billion-dollar, three-year stand-by program already agreed with the IMF to fund its budget deficit.
Turkey is to put 51 percent of Turkish Airlines and 33.5 percent of the Turkish Telekom up for sale. Details of the privatizations are due for release Thursday -- FRANKFURT (AFP)
© 2000 Al Bawaba (www.albawaba.com)
