The International Monetary Fund (IMF) has offered Turkey 19 billion dollars (15 billion euros) in credit despite the government's push for a larger loan, the Zaman newspaper reported on Monday. Turkish officials have declined to reveal the amount Ankara is seeking, but Zaman said the government had been aiming at a loan of between 20 billion and 40 billion dollars to weather the global financial crisis.
Turkey could normally receive 15 billion dollars at most in IMF credit, but the Fund has raised its offer to 19 billion dollars, the daily said. The type of the deal to be signed is not yet clear, it added. Economy Minister Mehmet Simsek said last month that Ankara was discussing a possible precautionary stand-by deal, but reported disagreements with the Fund on spending policies.
Turkey completed a three-year 10-billion-dollar stand-by deal with the IMF in May, which significantly stabilised the economy and resulted in strong growth in the wake of a severe financial crisis in 2001. Ankara was then unable to decide which follow-up programme to implement, and now that global financial strains have spiralled into a full-blown crisis, the government is under stronger pressure to agree a new deal with the IMF.
A precautionary stand-by programme would allow the country access to IMF funds if needed. Officials maintain Turkey is not in an urgent need for IMF funds, but say that a deal with the international lender would boost foreign confidence in the country's economy.
The Turkish economy has been one of the strongest in the region in recent years, having grown 9.4 percent in 2004, 8.4 percent in 2005 and 6.9 percent in 2006. But growth slowed down to 4.6 percent in 2007 and decreased to an unsettling 1.9 percent in the second quarter this year. Earlier this month, Standard and Poor's downgraded Turkey's economic outlook from stable to negative, citing higher risks in external financing for the private sector, notably for banks and corporations.
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