Turkey/IMF: Minister Cites A Disagreement On Numbers

A source said the draft letter was endorsed by the IMF on Wednesday, with Turkish official signatures needed next. The letter is supposed to be signed by Economy Minister Ali Babacan and the central bank governor, Sureyya Serdengecti.

"There’s no news about the signatures since Wednesday, so apparently the government is trying some more bargaining," one of the sources said.

The economy ministry was unavailable immediately for comment.

Turkey/IMF -2: Minister Cites A Disagreement On Numbers

Economy minister Babacan at a late Thursday interview at the Kanal D television channel said there’s still a disagreement with the IMF on the numbers in a chart contained in the letter.

The IMF letter of intent includes charts and numbers, usually with important details like the targeted budget surplus numbers.

Babacan said there’s no pledge in the letter that isn’t approved by his government. "One can’t live in Washington D.C. and be aware of Turkey’s realities," Babacan said.

Thomas Dawson, the IMF director of external affairs, told reporters Thursday that the IMF expects the letter of intent to be signed by Turkey this week.

However, Dawson said there are unnamed prior actions that need to be delivered by Turkey before the IMF board can convene for the loan.

"If the prior actions completed shortly; a board meeting would be held mid-April," Dawson said, adding that "In broad terms, things are on track."

Turkish markets are readying for a crucial week, as the treasury has to repay 4,303 trillion lira ($1-TRL1,655,000) of maturing debt on April 9, and is expected to auction debt paper earlier to rollover the amount. This will be the Treasury’s first test after the Iraq war, which has pushed up debt yields.

Market participants still expect an easy debt rollover, as the U.S. Congress Thursday endorsed a $1 billion grant to Turkey, and the amount is convertible to $8.5 billion loans. The aid requires Turkey’s cooperation with the U.S. on Iraq.

-By Selim Atalay, Dow Jones Newswires; +90212 2313355; [email protected]