Turkey meets IMF condition

ANKARA (Reuters) – Turkey’s Parliament has passed a key banking reform law, fulfilling an International Monetary Fund condition for its executive board to release the next loan tranche under the country’s standby accord. However, parliamentary officials said another IMF condition, a social security reform, looked set to be carried over to the next parliamentary term scheduled to begin in October, as the assembly prepared to enter its summer recess on Sunday. Deputies passed the banking law at a session on Saturday evening, with 232 MPs approving the bill out of 234 who took part in the vote. Members of Parliament from the opposition Republican People’s Party (CHP) did not participate in the session. Turkey had pledged to pass the reforms by the end of June to complete the first review of its new $10 billion standby deal. The IMF’s Turkey representative told Reuters last week that Ankara must pass both the social security and banking reform bills for the Fund’s executive board to meet and agree on the loan tranche of some $800 million. The banking reform was a formal performance criterion for the first review of the new IMF pact, which succeeds a $19 billion program that expired in February. The social security reform is also sought by the IMF to reform the country’s lumbering pensions system and narrow a huge social security deficit.

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