Turkey authorized to get US$1.51bn in fresh funds

The International Monetary Fund announced Friday it had authorized Turkey to immediately withdraw US$1.51 billion from its US$19 billion credit line.

Turkey has already used about US$10 billion of the loan.

The decision to release the latest installment was taken after the Fund's Executive Board completed a review of Ankara's progress in applying IMF-backed economic measures.

"Executive Directors commended the Turkish authorities on the strong implementation of their ambitious economic reform program," IMF First Deputy Managing Director Stanley Fischer said.

"Major progress has already been achieved in restructuring the banking sector, improving budget transparency, and preparing the privatization of state-owned enterprises," he said.

"Together with a strong macroeconomic framework, these measures are creating the basis for a lasting reduction in inflation and a dynamic economy generating sustainable growth."

Fischer, who visited Turkey in late July, said he saw encouraging signs that its economic downturn is bottoming out and inflation is flagging, which could allow a lowering in interest rates.

The Fund said it was looking in upcoming months for Turkish authorities to communicate more effectively the program's basic strategy "to achieve government debt sustainability through major budget adjustment, strong supply-oriented policies, and exceptionally large financial support from the Fund and other lenders."

It noted that Turkish authorities had decided to adopt inflation targeting in the fourth quarter "which will strengthen and lend much-needed clarity to the monetary framework."