ECONOMY

Istanbul exchange closed as PM urges markets to be calm

ISTANBUL (AFP) – The Turkish stock exchange was closed on Wednesday to escape panic following terrorist attacks in the US, and Prime Minister Bulent Ecevit urged calm in the already crisis-ridden Turkish markets. Given the extraordinary situation in the United States and the resulting uncertainty in the international financial markets, no trading will take place today (yesterday), the head of the Istanbul bourse Osman Birsen announced. The statement said the stock market would re-open today. The Istanbul gold exchange was also closed for a day, the Anatolia news agency reported. The head of the stock investors’ association said the stock market might remain closed until next Monday to avert possible falls, triggered by uncertainty over the US response to the attacks and the international economic impact of Tuesday’s incidents. The closure of the stock market will prevent sharp declines and panic among people here until the wave of panic calms down and the US measures become visible, Ali Bahcuvan told Anatolia. Turkey’s central bank yesterday canceled a planned auction of $20 million for lira, and said it was ready to intervene directly in the foreign exchange market to prevent fluctuations in the crisis-battered lira. The bank said the steps were aimed at minimizing the negative effects of the tension on our markets caused by the tragic terrorist attack in the US. It said it anticipated limited forex trade in Turkey but no technical problems in actually carrying out trade with US banks. It also promised to provide liquidity on an overnight basis to any banks that required it. Meanwhile, Ecevit reassured investors that an IMF-backed economic program and the Fund’s financial support for Ankara remained on track. Our efforts to heal the economy will not be derailed… there is no place for concern, Ecevit told reporters after a cabinet meeting. However, he acknowledged the possibility that the attacks against US targets could deepen global economic problems. Turks fear that the impact of Tuesday’s attacks in Washington and New York could aggravate the local economic crisis. Severe economic turmoil hit Turkey in February, causing the lira to lose more than 50 percent of its value and sending the economy into a recession. Economy Minister Kemal Dervis said yesterday that an IMF review of Turkey’s progress in meeting conditions laid out in a $15.7-billion crisis rescue pact is going as planned. The IMF and the World Bank agreed to the loans in May in return for a Dervis-inspired economic reform program designed to rescue the country from a February financial crisis that the government says will bring a 5.5-percent contraction in the gross national product this year. The IMF delegation, headed by Turkey desk chief Juha Kahkonen, is continuing its planned contacts within the scope of its 10th review of a Stand-By Accord which began in Ankara on September 7, 2001, Dervis said. The IMF executive board is due to release the latest $3-billion loan tranche after meetings in October if Turkey meets pledges it made in a latest letter of intent to the fund.