Turkey, IMF near deal
Güncelleme Tarihi:
Hurriyet Daily News wilh wires
Oluşturulma Tarihi: Nisan 11, 2009 00:00
ISTANBUL - State Minister Mehmet Şimşek says Turkey will complete face-to-face talks with the International Monetary Fund on a new loan accord by April 25, when the IMF’s spring meetings begin
Turkey and the International Monetary Fund have agreed in principle on the conditions of a new loan deal worth up to $45 billion to help the country weather the global crisis, several newspapers reported Friday.
Economy Minister Mehmet Şimşek said Turkey would complete face-to-face talks with the IMF on a new loan accord by April 25, business daily Referans reported. Şimşek was quoted as saying that Prime Minister Tayyip Erdoğan and IMF Managing Director Dominique Strauss-Kahn have agreed in principle to the foundations of a deal.
Turkey has agreed with the IMF on structural measures and will sign an accord that would cover the country's external financing needs, Şimşek told reporters. Şimşek said he hoped to have the deal approved by the IMF in two to three weeks, according to Referans. The IMF's board will meet in May to approve the deal, Bloomberg cited Şimşek as saying.
Pressure for an accord has mounted as the economy slumped in recent months, putting it on course for deep recession, reported Reuters. Turkey’s gross domestic product tumbled 6.2 percent in the fourth quarter and industrial production slid by a quarter in February.
Turkey may require $45 billion from the IMF to cover financing needs over the next three years, daily Radikal said without citing a source. Other newspapers quoted different amounts.
Turkey's government may request $25 billion in loans from IMF, as it doesn't want to sign a large loan accord because that would create the impression that Turkey's economy is in difficulty, the Istanbul-based daily Sabah said, citing Treasury officials who asked to remain anonymous. The initial size of the deal was seen at $20 billion, analysts said.
Meanwhile, Caroline Atkinson, the IMF’s director of external relations, said talks with Turkey about a possible loan "continue to be active."
"Indeed on the margins of the G20 meeting, there were some interactions there with our managing director," Atkinson said in a press briefing Thursday.
The IMF’s spring meetings scheduled for April 25 and 26 will be a chance for countries to discuss loans with IMF officials, Atkinson said.
Spending restrictions
One of the key principles of the prospective new deal was to avoid new measures aimed at raising new revenue to compensate for cuts in special consumption and value-added taxes. The two sides also agreed to either restrict spending or set a limit for the budget deficit.
"This is very positive and diminishes the investment risks. Therefore investors should not focus on the absolute loan size because that is irrelevant. All-in-all positive expectations still prevail in the market," said Tera Stockbrokers in a note.
Economy Minister Mehmet Şimşek said Turkey would complete face-to-face talks with the IMF on a new loan accord by April 25, business daily Referans reported. Şimşek was quoted as saying that Prime Minister Tayyip Erdoğan and IMF Managing Director Dominique Strauss-Kahn have agreed in principle to the foundations of a deal.
Turkey has agreed with the IMF on structural measures and will sign an accord that would cover the country's external financing needs, Şimşek told reporters. Şimşek said he hoped to have the deal approved by the IMF in two to three weeks, according to Referans. The IMF's board will meet in May to approve the deal, Bloomberg cited Şimşek as saying.
Pressure for an accord has mounted as the economy slumped in recent months, putting it on course for deep recession, reported Reuters. Turkey’s gross domestic product tumbled 6.2 percent in the fourth quarter and industrial production slid by a quarter in February.
Turkey may require $45 billion from the IMF to cover financing needs over the next three years, daily Radikal said without citing a source. Other newspapers quoted different amounts.
Turkey's government may request $25 billion in loans from IMF, as it doesn't want to sign a large loan accord because that would create the impression that Turkey's economy is in difficulty, the Istanbul-based daily Sabah said, citing Treasury officials who asked to remain anonymous. The initial size of the deal was seen at $20 billion, analysts said.
Meanwhile, Caroline Atkinson, the IMF’s director of external relations, said talks with Turkey about a possible loan "continue to be active."
"Indeed on the margins of the G20 meeting, there were some interactions there with our managing director," Atkinson said in a press briefing Thursday.
The IMF’s spring meetings scheduled for April 25 and 26 will be a chance for countries to discuss loans with IMF officials, Atkinson said.
Spending restrictions
One of the key principles of the prospective new deal was to avoid new measures aimed at raising new revenue to compensate for cuts in special consumption and value-added taxes. The two sides also agreed to either restrict spending or set a limit for the budget deficit.
"This is very positive and diminishes the investment risks. Therefore investors should not focus on the absolute loan size because that is irrelevant. All-in-all positive expectations still prevail in the market," said Tera Stockbrokers in a note.