Turkish lira falls

The Turkish currency, the lira, has fallen sharply on the foreign-exchange markets after the government's decision to abandon exchange-rate controls. In early trade it lost nearly thirty per cent of its value against the dollar. The prime minister, Bulent Ecevit, announced the flotation of the lira - in effect, a devaluation - following several days of financial turmoil caused by the public row he's been having with President Ahmet Necdet Sezer over the pace of corruption investigations. The Turkish stock market, which fell heavily earlier in the week, rose around ten per cent following the decision. But leading business organisations and trade unions have criticised the devaluation, calling for an end to the row between Mr Ecevit and Mr Sezer and saying that ministers responsible for the crisis should be replaced.

Analysts say the devaluation means the abandonment of an anti-inflation drive, part of an economic reform programme backed by huge loans from the International Monetary Fund. The BBC Istanbul correspondent says that if the programme collapsed it would be a big blow for Turkey and for the IMF's policies around the world.

From the newsroom of the BBC World Service