IMF agrees Turkish rates too high -exporters' body

Written by:
Subscribe to Oneindia News

ISTANBUL, Oct 4 (Reuters) The International Monetary Fund agreed that interest rates in Turkey were too high when a delegation met the Turkish Exporters Assembly (TIM) on Thursday, the head of the exporters' body said.

Speaking to reporters after meeting with the IMF delegation at the start of its visit to Turkey, president Oguz Satici said TIM wanted an aggressive rate-cutting policy, but he gained the impression the IMF preferred a measured rate-cutting process.

There was no immediate comment from the IMF on the subject, but Satici said the Fund's position would become clear in the coming days.

The central bank surprised markets by cutting the borrowing rate by 25 basis points to 17.25 percent last month, while the lending rate was cut by the same amount to 22.25 percent.

Analysts expect more rate cuts in the remainder of the year but the bank has said it is retaining a cautious stance while it follows inflation developments.

Turkish interest rates are still some of the highest in emerging markets. The central bank raised the borrowing rate by 425 basis points last year after a spike in inflation sparked a sudden market sell-off and a slide in the lira.

The IMF began its visit to Turkey in Istanbul on Thursday and it will hold official talks in Ankara from next Monday on the latest review of Turkey's billion loan programme.

The talks will focus on the latest macroeconomic situation and expectations, as well as the 2007 public financial performance, structural reforms and the monetary policy and public fiscal programme targets for 2008.


Please Wait while comments are loading...