Babacan hopeful on IMF

ISTANBUL (Reuters) – Economy Minister Ali Babacan said yesterday it may be a month before Turkey does enough to secure its next loan tranche from the IMF, though he was optimistic Ankara could win the lending in late June. Turkey’s Parliament passed a key IMF-backed law easing foreign investment late on Thursday, but it has still to tackle several delayed laws, including social security reform, some of which were pledged by the end of April. «There are processes in Parliament… Our expectations are that the letter of intent will be sent and the board will meet in the second half of June. We’re optimistic,» Babacan told the local CNN Turk television. «Definite times and definite dates can never be given. There is uncertainty, it could be three days, it could be a month.» Turkish markets have rallied strongly in recent weeks after the end of war in Iraq on optimism the IMF pact was paying dividends for Turkey’s frail economy, recovering from a financial crisis in 2001. The IMF board was originally due to meet by mid-June to approve the loan tranche. Analysts have warned that lira and debt yields might reverse recent months-long highs if the IMF board meeting is delayed beyond June. «The present government seems to have interpreted the improvement in market variables and the associated steady increase in its popularity as a vindication of its unorthodox policies,» JPMorgan said in a research report. «We do not expect the next IMF disbursement before the second half of July.»

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