IMF approves drawing under Stand-By Arrangement for Turkey, commends ambitious economic program IMF approves $1.5 billion for Turkey

Pages261-262

Page 261

The IMF Executive Board announced on August 3 that it had completed the ninth review of Turkey's economic program supported by the three-year Stand-By Arrangement. The Board's decision will enable Turkey to draw SDR 1.2 billion (about $1.5 billion) immediately from the IMF. The text of News Brief No. 01/73, as well as a statement issued on July 28 by IMF First Deputy Managing Director Stanley Fischer (see page 262) is available on the IMF's website (www.imf.org).

The Stand-by Arrangement for Turkey was approved in December 1999 for SDR 2.9 billion (about $4 billion. In December 2000, SDR 5.8 billion (about $7 billion) in additional financial resources was made available under the Supplemental Reserve Facility. On May 15, 2001, the IMF approved the increase of the Stand-By credit by SDR 6.4 billion (about $8 billion), bringing the total available resources from the IMF to SDR 15 billion (about $19 billion; see Press Release No. 01/23). So far, Turkey has drawn a total of SDR 8.1 billion (about $10 billion) from the IMF.

Commenting on the Board's discussion, Acting Chairman Stanley Fischer said: "Executive Directors commended the Turkish authorities on the strong implementation of their ambitious economic reform program.Major progress has already been achieved in restructuring the banking sector, improving budget transparency, and preparing the privatization of state-owned enterprises. Together with a strong macroeconomic framework, these measures are creating the basis for a lasting reduction in inflation and a dynamic economy generating sustainable growth.

Page 262

"There are encouraging signs that the economic downturn is bottoming out and that the targeted lowering of inflation is materializing, which could permit declines in interest rates. Directors noted the importance of declining interest rates for supporting the economic recovery and helping ensure that the treasury's rollover requirements in the months ahead are met. The government's recent efforts to demonstrate full and united support for the program, and greater consistency in its communications, are welcome steps toward restoring confidence. The IMF looks forward to further efforts in the months...

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