12/25/2007

Turkey to consider precautionary stand-by deal with IMF

Today's Zaman - Turkish government has begun to examine the options for a new deal with the International Monetary Fund (IMF), which will be necessary after the current 19th stand-by agreement expires in May 2008. According to analysts, three different options stand out among the alternatives presented by the IMF: a precautionary stand-by, post-program monitoring and normal stand-by. For analysts close to the government, the economic management of the country is much more likely to select a precautionary stand-by agreement with the IMF. Those claiming that Turkey should agree to a precautionary stand-by deal are citing the recent improvements in the economy as sufficient justification for such an agreement. They say Turkey's current economic infrastructure, which has proven solid during the turbulence of this year and the accompanying structural development are providing an opportunity to negotiate on better terms. Being a net payer to the IMF, the progress in the convergence criteria for EU membership, the massive inflow of foreign capital and an increase in international financing options are other advantages that Turkey has against the IMF. Therefore a precautionary stand-by is a more reasonable option, they claim.