Welcoming a flexible IMF accord

Bloomberg

refid:11298521 ilişkili resim dosyası

The IMF said on March 24 it would double credit limits for countries struggling with the financial crisis and ease loan conditions for emerging nations that need short-term assistance. Turkey is negotiating a longer-term stand-by accord with the fund.

"The IMF may prefer a longer-term stand-by relationship with countries like ours," Şimşek told reporters in Gaziantep, southern Turkey. "It would be positive if the new approach means there’s a new perspective on" the size of the spending cuts the IMF will want from Turkey to qualify for a loan accord.

Turkey wants IMF support to help restore confidence in the economy, support the Turkish Lira and finance a budget deficit that will widen as the economy moves toward recession. The two sides broke off face-to-face talks in January amid disagreements over changes to the tax system and spending cuts.

Şimşek said it was "good" for the fund to recognize that fighting the global crisis requires "the use of front-loaded IMF resources and an initial flexibility on uses and conditions."Turkey’s budget deficit is sure to widen this year as tax revenue from a slowing economy declines and the government steps up spending in a bid to stimulate activity, Şimşek said Wednesday.