ECONOMY

Turkey to cut zeros from lira

LONDON (Reuters) – Turkey may redenominate its lira currency, maybe toward the end of 2004, providing inflation is under control, Kemal Unakitan, Turkey’s finance minister told reporters in London late yesterday. He also reiterated that Turkey’s privatization program is on course. Turkey’s lira traded at 1.374 million to the dollar yesterday, and consumer price inflation was 24.9 percent year on year in August. Unakitan was in London to meet with investors including bond holders, foreign direct investors and equity fund managers as part of a trip supporting Turkey’s privatization program. Overseeing privatization is an important part of Unakitan’s responsibilities as finance minister. «The zeros (on the bank notes) issue is not a target, it is just a natural outcome of bringing down inflation. The government target is to bring down inflation and in 2004 the target is around 12 percent,» he said. A redenomination might then begin at the end of 2004, he said. The country’s $16 billion economic recovery pact with the International Monetary Fund includes a promise to reduce inflation to 20 percent by the end of this year. Despite some delays to the landmark privatizations, everything was going according to plan, he said. In September Turkey has extended the deadline for bids on state cigarette and spirits maker Tekel to October 24 from September 26, the privatization office said, after the flagship sale attracted a high level of interest. So far, 42 small privatizations had taken place, raising a total of $268 million. Turkey might raise this total to $4 billion if it completes its large privatizations.