Turkey calls off talks with IMF for loan

Turkey confirmed yesterday that it was no longer holding talks with the IMF about a stand-by loan and said it did not need emergency funds, but left the door open for a possible agreement in future.

An IMF spokeswoman in Washington said late on Tuesday that talks on a stand-by loan had been called off, ending months of speculation in financial markets. The Washington-based organisation said a mission would travel to Turkey in the first half of May for annual consultations on the economy.

"There will be no talks regarding the programme until May," Turkish Economy Minister Ali Babacan told a conference in Istanbul yesterday morning. "Our meetings, our efforts will solely focus on the meeting in May with the evaluation committee from the IMF."

Babacan said the government would stick to its medium economic programme, which was announced last September and is aimed at reducing a budget deficit and boosting fiscal discipline. But the minister said obtaining a stand-by loan accord was always an option for any IMF member state.

Prime Minister Tayyip Erdogan was due to speak later in Istanbul.

Istanbul's stock market fell more than one per cent on opening after news the talks were off but recovered and was flat by late morning.

Ankara had been holding stop-start negotiations with the IMF ever since its last stand-by deal expired in May 2008, but as it weathered the crisis Ankara began to suggest it did not need the money, even as markets was hopeful of a deal.

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