By
Associated Press
ANKARA, Turkey - The International Monetary Fund has agreed in principle to extend billions of dollars in loans to Turkey to help it overcome its latest financial crisis, a newspaper reported yesterday.
IMF officials were in Turkey waiting for the government to appraise the cost of the crisis before determining how much was needed, Turkey's Finansal Forum newspaper said.
The crisis, sparked by a feud between Prime Minister Bulent Ecevit and President Ahmet Necdet Sezer, led to a fall in the value of the lira, price hikes and layoffs. It came after Turkey lifted its currency controls. The Turkish lira has lost 26 percent of its value in the last week.
Ecevit and Sezer, who clashed over the government's anti-corruption measures, held their first one-on-one meeting yesterday since their clash. Neither made a statement after the 20-minute meeting.
Ecevit said Wednesday that Turkey was hoping for $25 billion in loans. It was unclear if he meant $25 billion in new loans, or an increase to the previous $11 billion loan from the IMF.
The earlier loan, approved last year, was to support an anti-inflation program and to help the country cope with the effects of devastating earthquakes in 1999 and a financial crisis in November.
Finansal Forum said Turkish officials estimate that the country will need between $10 billion and $20 billion to overcome the effects of the current crisis.
Meanwhile, President Bush urged Turkey to continue its reforms and work with the IMF.
"Turkey has achieved much through its program of political and economic reform and modernization," Bush wrote in a letter to Sezer that was released by the Turkish president's office yesterday.
"The United States will continue to support Turkey in these efforts, and I urge you to continue working with the IMF also," it said.
Ecevit has said repeatedly that he will not resign and has refused to fire any ministers over the crisis.
