Search

 

Cablegate: Fund Mission and Got Reach Agreement On Loi, Shoot

This record is a partial extract of the original cable. The full text of the original cable is not available.

211040Z Jul 03

UNCLAS ANKARA 004551

SIPDIS


SENSITIVE


STATE FOR E, EB/IFD AND EUR/SE
TREASURY FOR OASIA - MILLS AND LEICHTER
NSC FOR BRYZA


E.O. 12958: N/A
TAGS: EFIN ECON PGOV TU
SUBJECT: FUND MISSION AND GOT REACH AGREEMENT ON LOI, SHOOT
FOR AUGUST 1 BOARD DATE


REF: ANKARA 4480


1. (SBU) IMF Mission Director Reza Mogdaham and State
Minister Ali Babacan announced July 20 that they had reached
initial agreement on a Letter of Intent. In a brief
telephone call, IMF ResRep (protect) advised July 21 that,
assuming IMF management approval of the agreed-upon text,
they hope to sign the LOI this Friday (July 25) and have the
Board review the following Friday (August 1). He said Fund
staff supported this accelerated approach to compensate for
some of the delays in completing the Fifth Review.


2. (SBU) As reported reftel, the main factor facilitating
the agreement was the GOT's decision to take a series of
measures to close the projected TL 2.5 quadrillion fiscal gap
in this year's budget. IMF ResRep said implementation of
these measures -- already underway -- along with
Parliamentary passage of the two remaining pieces of social
security legislation, without amnesty provisions, were prior
actions for the Board review. We understand the full
Parliament will consider these two bills this week. (Note:
The press reported last week that Parliament had approved the
legislation; in fact, only a Parliamentary committee had
approved them. End note) ResRep said a Fund technical
assistance team had made good progress working with the GOT
to narrow differences on a proposed social security amnesty.
Based on that, ResRep is now hopeful that the GOT's proposal
on this issue will address the Fund's concerns.


3. (SBU) ResRep said Fund staff continue to work with GOT
officials on the Financial Management and Control Law as well
as direct tax reform legislation. On the latter, he said the
GOT had "so many bad ideas" that Fund staff had asked them to
postpone the legislation, pending arrival of another Fund
technical assistance team. Embassy will report more fully on
structural issues following a July 23 meeting with ResRep.


4. (SBU) Separately, the Central Bank intervened in the
currency markets in a big way on Friday, buying $940 million
above its normaly daily purchase in response to what the Bank
called excessive volatility. The intervention (actually the
Bank intervened 2-3 times during the course of the trading
day) pushed the lira, which had reached TL 1.375
million/dollar, back to TL 1.4 million/dollar before it
recovered to close at TL 1.395 million. The Bank also cut
overnight interest rates three percentage points and
increased its daily dollar purchases from $40 to $50 million
late last week. Local analysts, such as Istanbul-based
Bender Securities, are growing increasingly skeptical of the
Bank's claim that it is intervening only in response to
excessive volatility.
PEARSON

© Scoop Media

 
 
 
World Headlines

 


Myanmar: UN Condemns Escalating Violence In Deadliest Day Of Protests So Far

In response to the killing of at least 18 protesters demonstrating against Myanmar’s military coup, the UN human rights office (OHCHR) on Sunday together with the UN chief, strongly condemned the “escalating violence” and called for an immediate end to the use of force... More>>

Syria: Economic Decline, Rising Hunger And Surging Humanitarian Needs

Syria’s fragile economy has “suffered multiple shocks” over the past 18 months, with its currency plummeting and joblessness swelling as people struggle to cover their basic needs, the UN Emergency Relief Coordinator told the Security Council ... More>>

OECD: Final Quarter Of 2020 Shows Continued Recovery In G20 International Merchandise Trade

G20 international merchandise trade continued to rebound in the fourth quarter of 2020 ( exports up 7.2% and imports up 6.8%), following the sharp falls seen in the first half of 2020, as lockdown measures affected trade globally. Although growth ... More>>


Focus On: UN SDGs


UNFCCC: Greater Climate Ambition Urged As Initial NDC Synthesis Report Is Published

UN Climate Change today published the Initial NDC Synthesis Report, showing nations must redouble efforts and submit stronger, more ambitious national climate action plans in 2021 if they’re to achieve the Paris Agreement goal of limiting global temperature rise by 2°C—ideally 1.5°C—by the end of the century... More>>


2021: Critical Year To ‘reset Our Relationship With Nature’ – UN Chief

During this time of “crisis and fragility”, the UN chief told the United Nations Environment Assembly on Monday that human well-being and prosperity can be vastly improved by prioritizing nature-based solutions. Painting a picture of the turmoil ... More>>


Paris Agreement: UN Secretary-General António Guterres To Mark U.S. Reentry With Envoy For Climate John Kerry

Watch live at webtv.un.org UN Secretary-General António Guterres will join U.S. Special Presidential Envoy for Climate John F. Kerry at an event marking the United States’ reentry into the Paris Agreement this Friday. The discussion with the Secretary-General ... More>>