Turkey signs letter of intent for new $10 billion standby deal

ANKARA (Reuters) – Turkish Economy Minister Ali Babacan said yesterday Turkey had signed and sent a letter of intent to the International Monetary Fund on a new $10 billion standby deal. He said Turkey expected the Fund’s board to meet to discuss the deal, which replaces a previous accord that expired in February, during the week starting on May 9. «We signed and sent the letter of intent yesterday evening,» Babacan said at a news conference. Turkey inked its new deal with the IMF last December, but the Washington-based fund has withheld its approval due to delays in tax, banking and social security reforms. An IMF team visited Turkey earlier this month to help update the original letter of intent. The Turkish parliament passed a tax administration bill and began debating other reforms required by the IMF as a condition for the new deal. Under the tax reform, Turkey establishes a separate and more powerful administrative office for boosting tax revenues and reducing the size of the unregistered economy. Babacan said he expected a social security draft law also sought by the IMF to be approved before parliament goes into summer recess at the end of June. Turkey’s previous IMF deal, worth $19 billion, helped pull the country from a deep financial crisis which peaked in 2001. Babacan has said the new IMF deal could be Turkey’s last and is intended to support the country’s integration into the European Union. Turkey is due to start EU entry talks in October, but is not expected to join the bloc for many years.

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