Turkey expects to pay less in debt interest payments

Turkish Finance Minister Sumer Oral said yesterday that state debt payments could be slightly lower than outlined in the budget this year. «This year could end up having lower interest payments than projected. That’s our expectation,» Oral told reporters after a meeting with visiting International Monetary Fund Turkey desk head Juha Kahkonen in Ankara. The Treasury said earlier that domestic debt stock rose to 123,290 trillion lira ($86 billion) at the end of April from 120,299 trillion lira at the end of March. Oral did not say why he thought interest payments would be lower than expected, but Turkey’s $16 billion IMF pact signed in February made forecasts based on a projected average nominal treasury bill interest rate over 2002 of 69.6 percent. Debt yields have fallen sharply since the pact was signed in February, reaching lows of around 52 percent earlier this month before returning to around 61 percent due to concerns about the prime minister’s health. Turkey’s debt stock has ballooned since a financial crisis in February 2001 forced the state to issue large amounts of paper to fund the overhaul of its creaking banking system. Domestic debt stock at the end of April 2001 was 59,210 trillion lira, the Treasury reported at the time. Managing the swollen debt load is one of the biggest challenges as Turkey implements the IMF program aimed at overcoming last year’s devastating financial crisis. (Reuters) Some industry sources are also expressing doubts regarding the viability of some of the other projects and consider it likely that other ways, possibly public funding, will be sought for their implementation.