IMF to check on Turkey

ISTANBUL (Reuters) – International Monetary Fund officials are expected to visit Turkey in the first week of March for the sixth review under a $10 billion loan program, Turkish officials said yesterday, but added that no fixed date had been set. The IMF will at the same time do its Article IV review – a general review it carries out in all members but which it has not carried out in Turkey recently because of the more detailed standby program reviews. Turkey has fallen behind on structural reforms as elections approach and on its pledges to the IMF, delaying and making changes to a social security reform and delaying the privatization of Halkbank. But economy officials said in an election year – Turkey holds presidential elections in May and general elections in November – the IMF was not expected to take a hard line. «In an election environment the IMF is not expected to push too hard although the calendar for structural reforms will be discussed,» one official said. The officials said monetary policy, fiscal policy – and whether there would be a loosening of discipline – interest rates and inflation would be discussed. Turkey’s real interest rates are some of the highest in emerging markets since a 4.25 percentage point hike in benchmark borrowing rates last year aimed at curbing soaring inflation. Further reviews are due to be carried out in July and December, and no decision has yet been reached as to whether reviews could be run together as happened last year, the officials said. The IMF’s loan program helped pull Turkey out of a deep 2001 financial crisis. But since 2002 it has cut its debt to the international lender to $8.5 billion from around $23 billion, Prime Minister Recep Tayyip Erdogan said yesterday.