IMF team to leave Turkey after talks on 2002 plans

ANKARA (Reuters) – International Monetary Fund inspectors are expected to leave Turkey today after discussions about the country’s plans for 2002, the treasury said yesterday. They said it was unclear whether the IMF delegation, headed by Turkey desk chief Juha Kahkonen, would speak to the press before its departure. There may well be written statements from the treasury and from the IMF, a treasury official told Reuters. The IMF team has been in Turkey since September 7, inspecting performance under an IMF and World Bank program that hands out $15.7 billion this year to help the country roll over domestic debt swollen by a bailout of a crisis-struck banking sector. Turkey appears to be meeting the fiscal and monetary targets laid out in the pact, despite the worst domestic recession since 1945, which has reduced tax revenues as the economy contracts. The latest IMF visit has also focused on the macroeconomic framework for Turkey’s 2002 budget, a subject riddled with uncertainty after attacks last week on the United States. In addition to global market turmoil and fears of recession sparked by that attack, Turkish and IMF officials have yet to fully commit themselves to plans to tackle Turkey’s chronically high inflation. Turkish officials have been working on an inflation targeting mechanism under which the newly independent central bank would use interest rates and money supply to try to rein in inflation of around 60 percent annually. But the details of that plan, and its impact on monetary targets, have yet to be ironed out. Discussions with the IMF will continue, Turkish officials said, building up to a letter outlining Ankara’s plans to be approved by the IMF in early October along with the release of some $3 billion in lending. Turkey is also discussing a delay in the repayment of part of some $5 billion it is due to remit to the IMF in 2002.

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