ECONOMY

Hope lifts Turkish stocks

ISTANBUL – Turkish stocks soared while bonds and the lira strengthened on Monday after Economy Minister Kemal Dervis boosted hopes for foreign loans the country needs to overcome a deep financial crisis. Dervis said Turkey could expect positive movement this week as it seeks fresh international funds to fill a 2002 financing gap brought on by a multibillion dollar bailout of crisis-hit banks. Turkey’s main share index rose 5.47 percent to 9,305.31 points, while the yield on benchmark bonds maturing on March 6, 2002 eased to 86.49 percent from Friday’s 87.94 percent. Remarks by Minister Dervis might be taken positively, said Kadir Konukoglu of Ak Securities in Istanbul. We think the IMF may accept the work on the (2002) budget. This may affect the markets further in the coming days, Konukoglu said. Dervis said he believed an IMF team would arrive in Turkey later this week to review the 2002 budget and other key fiscal and monetary measures designed to tackle a huge debt mountain and help Turkey out of its worst recession since 1945. Turkey’s troubled lira on Monday firmed to 1,630,000 to the dollar on the central bank-brokered spot market from Friday’s close of 1,641,000 and intraday lows of 1,654,500 in an earlier central bank daily auction of dollars. Turkey hopes to secure up to $13 billion from international lenders to plug a 2002 financing gap, saying $15.7 billion in IMF and World Bank loans slated for 2001 fail to meet its needs after the September 11 attacks shattered global confidence. The talks will also focus on releasing the next tranche of a $15.7 billion crisis-aid package to Turkey. The IMF last week said it was too soon to talk about increasing lending. On Thursday a US treasury official said it was not yet clear how the attacks had impacted Turkey’s economy. A statement by President Ahmet Necdet Sezer that a dispute over MPs’ salaries could be resolved by a vote in Parliament instead of a referendum also helped comfort investors nervous that a popular vote could destabilize the government. Sezer had earlier ordered a referendum to decide whether MPs could set salaries previously hiked in line with those paid to top-level bureaucrats. The announcement of a Turkish plan to issue a 500 million euro bond via European banks helped strengthen bond prices, brokers said. Turkey’s treasury confirmed a Reuters report earlier in the day that quoted European bankers as saying Turkey had mandated Deutsche Bank and Commerzbank for a sale they expected to be completed in the next few days.