The IMF is to negotiate a new loan with Turkey in the coming month, to compensate for the economic fallout in the wake of the September 11 terror strikes on the United States, said Fund director Horst Koehler.
"Directors welcomed the assessment of the mission recently in Ankara that implementation of the program has been very strong," Koehler said in a statement Thursday after an informal meeting of the International Monetary Fund's Executive Board on Turkey.
"However, in the aftermath of September 11 a financing gap of approximately 10 billion dollars for the remainder of 2001 and 2002 has arisen," he added. "In light of this external shock, Turkey is committed to strengthen further its effort in the areas of fiscal policy, banking and structural reform, and to seek continued support from the private sector.
Koehler said that the IMF's decision was taken based on a "very constructive discussion" Thursday at the board meeting. Koehler will recommend "completion of the tenth review in the near future and a new stand-by arrangement, to be negotiated over the next month, to support the authorities' ambitious reforms and close the financing gap," the IMF chief said.
Turkish Economy Minister Kemal Dervis said Wednesday that international finance organizations were expected to make "an important announcement" on new long-term, low-cost loans to help Turkey's economic recovery program.
Dervis told the parliament's budget commission he believed the government would be successful in obtaining the loans it needed to decrease its debt burden and achieve positive growth. The Turkish press speculated the IMF agreed to give the Turkish government an additional nine billion dollars in financial assistance.
Already in May, the IMF agreed to boost by eight billion dollars its stand-by credit line to Turkey. That, bringing the total sum to $19 billion -- some 3.8 billion to be made available straightaway. Ankara has been in the grips of a severe economic crisis since February, when a crisis in the banking sector pushed the government to abandon the currency peg system which was key to the anti-inflation program upheld by the IMF. — (AFP, Washington)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)
