The Executive Board of the International Monetary Fund (IMF) has completed the second review of Turkey's economic performance under its three-year stand-by credit arrangement. The decision will enable Turkey to withdraw $1.15 billion from the facility immediately, stated a press release.
The stand-by credit was approved this past February, totaling $16 billion, $10 billion of which has already been withdrawn. This is the third major aid program approved for Ankara in under two years. The credit was awarded in a bid to support Turkey's new three-year economic reform program, for 2001-2004.
"The Turkish authorities are to be commended for their strong policy performance. Fiscal policy has remained on course; the Central Bank of Turkey (CBT) has adhered to a prudent monetary policy; and structural reforms in banking and in the public sector have been impressive. These policies have delivered a sharp drop in inflation and inflation expectations, and the beginnings of an economic recovery,” commented IMF Managing Director and Chair, Horst Köhler.
"The central bank's contribution to reducing inflation and inflation expectations is a further major achievement. This should now be strengthened by advancing with the technical preparations for inflation targeting. The central bank should continue its policy of gradually building up its foreign exchange reserves, as long as the underlying balance of payments position permits. The authorities should also move further to reduce tax distortions in financial markets, added Köhler.
The Director also commented on the Bank Regulation and Supervision Agency (BRSA)’s achievements and pointed out the need for structural reforms in privatization. “A critical priority will be to provide reassurance to markets about economic, financial, and political stability, and thus the long-term credibility of Turkey's reform efforts," he said.
The credit arrangement has madeTurkey the IMF's largest borrower with a total of $31 billion. In return, the government has pledged to cut back its public sector, privatize key industries and reduce Turkey's debt. — (menareport.com)
© 2002 Mena Report (www.menareport.com)
