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Sunday, 14 January, 2001, 21:02 GMT
IMF arrives in Turkey
Turkey has ruled out devaluation of its currency
Turkey has ruled out devaluation of its currency
The International Monetary Fund (IMF) begins a series of meetings with Turkish officials on Monday to check on the progress of its $10bn bail-out of the country's crisis-hit economy.

The head of the IMF's Turkey desk, Carlo Cottarelli, is making the first of his regular visits to the country since the rescue package was agreed last month.

Mr Cottarelli will examine the implementation of tight economic measures designed to establish fiscal discipline in Turkey's public sector and pull down its chronic inflation.

The IMF package included $7.5bn in emergency funds, and another $2.9bn under an existing three year rescue deal.

Devaluation ruled-out

On Friday, Turkey's central bank and treasury and treasury to stick to the IMF's stringent anti-inflation plan.

And treasury chief Selcuk Demiralp said Turkey would begin weighing the prospects for foreign borrowing following this week's talks.

He also ruled out the prospect of a currency devaluation, which some observers have said is increasingly likely following the crisis and would likely cripple the rescue plan.

"I would like to underline that Turkey does not have any intention or even think of a devaluation," Demiralp said.

"We're now keeping to our foreign exchange policy as stated in the programme. There will be no change and no deviation."

Turkey's financial crisis was sparked by an investigation into corruption in Turkey's banking sector.

The subsequent turmoil, as interest-rates spiralled to 1,000%, had threatened to derail its existing agreement with the IMF.

Privatization

In return for the aid, Ankara pledged to speed up privatization and reforms in the banking sector.

Since then the government has announced tenders for the sale of 33.5% of Turkish Telekom and 51% of Turkish Airlines.

It is also working to sell eight of the 11 banks bailed out by banking authorities after failing to fulfil their financial obligations.

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See also:

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