ECONOMY

Turkey expects IMF board to meet today to discuss crisis loans

ANKARA (Reuters) – The IMF’s managing board will meet today to discuss the release of around $3.1 billion in delayed crisis loans for Turkey, Turkish treasury officials told Reuters yesterday. The IMF meeting in Washington on the release of a tranche from Turkey’s $19-billion aid package comes as Ankara and the fund prepare to seal a $10-billion addition to the deal. The monies under discussion today come from the existing deal and had originally been due for payment in September. Payment has been delayed by Turkish failure to implement some conditions earlier this year and by global turmoil after the September 11 attacks on the United States. The fund’s representative to Turkey, Juha Kahkonen, is expected in Ankara on December 3 for discussions on the new lending, which the fund has agreed Turkey needs to compensate for the economic upheaval after the September 11 attacks. Treasury officials said the new talks would focus on the reforms Turkey must enact to earn money under the augmented lending package. Those would be laid out in a letter of intent Turkey would send to the IMF after the talks. They said the new lending deal was likely to be a three-year standby package that would go into effect in 2002. The additional $10 billion is diluted in that Turkey has already said it will repay some $5 billion of the money to meet an existing loan repayment from an earlier bailout falling due to the IMF next year. The loans would be five-year loans with no repayments required for the first three years, the officials said. Turkey needs the money to help it pay off a domestic debt load swollen by an expensive bailout of a crisis-wracked banking system earlier this year. Bank of Greece Governor Lucas Papademos yesterday added to the sense of urgency for a speeding-up of structural reforms and fiscal adjustment. Speaking to an event organized by foreign commercial chambers in Thessaloniki, he said that beyond monetary stability, the adjustment of the modes of operation in both public and private sectors was also a prerequisite for Greece’s convergence with other EU economies.