Talks between Turkey and IMF stuck on allocation of loan funds

According to the report, the talks were focused on whether to transfer the funds to the Turkish Treasury or Central Bank.

 

Another issue discussed in the talks is the use of the funds. The IMF is likely to allow the funds to be used to support manufacturers as the economy slows, but the fund may be used for public finances, the report added.

 

A banker told Referans daily that if the funds transferred to the Central Bank then it could be kept as foreign reserves so that the money does not enter the system. For this reason some officials want the money transferred to the Turkish Treasury, the report said.

 

"If the funds are transferred to the Treasury, this will have a positive impact and will help the fall of both interest rates and foreign exchange rates," a banking source told Referans.

 

An IMF delegation is in Ankara to hold talks with Turkish officials on a new loan program which is expected to include $15-20 billion of financial support.

 

The government is under pressure from the business world and markets to cut a deal with the IMF as the impact of the global crisis becomes increasingly felt by the local economy.

 

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