Turkey plays down larger package expectation, says IMF deal nears end

Turkish Economy Minister Mehmet Simsek held a press conference on Friday in Ankara. Earlier in the day Reuters news agency said talks between Turkey and the International Monetary Fund to sign a new deal are in an advanced stage, and the sides reached agreement on the required public finance adjustment steps.

Simsek said the total value of the rescue packages that the countries had prepared is around 6.5 trillion dollars and each package contains different measures in line with the related country's conditions.

"Turkey's foreign exchange reserves are not much. So the measures that we can take are limited but it is obvious that the measures we have taken are effective," Simsek told reporters.

He added further measures would be taken in line with the budget resources and developments in the markets but played down the expectations of a package containing a series of new measures.

"Turkey does not have immunity to this crisis. We started to implement some measures to minimize the impacts of this crisis," he said.

IMF AGREEMENT

Simsek said the talks with the IMF on the program are still underway and it is about to be finalized, a move long-awaited by market players.

"We have a common ground with the IMF on the extent of the measures and our talks on the content of these measures are underway. We aim to finalize the IMF deal as soon as possible and in line with Turkey's national interests. The timing of the deal is important but it is secondary when you take the other elements into consideration," he added.

The minister said all deal options with the IMF were being studied, including a regular stand-by agreement. Turkey would officially apply for a new program after the deal was signed, he added.

Turkish business leaders and investors are eager for news on any agreement to support the flagging economy, which a Moody's analyst said would slip into recession without funding from the lender.

Turkey's latest $10-bln stand-by deal with the IMF has expired in May.

REDUCED FOREIGN FINANCING

Simsek said Turkey's external funding needs are less than the estimates of 30-35 billion dollars, but declined to give a figure.

"The external funding requirements may decline depending on improvements in global markets and even can get close to zero," he said.

The Economy Minister also ruled out the possibility of tax cuts. "I wish our budget let us to cut the indirect taxes. It is very hard for us to take tax cuts into consideration at the moment. Recently we are working on the steps to increase income and decrease spending."