IMF OKs tight Turk monetary policy until inflation drops
WASHINGTON (Reuters) – The International Monetary Fund late on Tuesday endorsed Turkey’s tight monetary policy and its plans to delay interest rate cuts until inflation nears the 4.0 percent target. «(IMF) directors underscored the importance of achieving a low single-digit inflation rate to reduce still-high real interest rates,» the IMF said in its annual review of Turkey’s economy. Its comments came as Turkey’s central bank is likely to keep interest rates on hold at a meeting today. The central bank is fighting inflation of more than 9.0 percent and is keeping an eye on government spending in the runup to July general elections. The IMF emphasized that Turkey’s economy was exposed to global market turbulence because of its dependence on large private capital flows, which required fiscal and monetary discipline.
