Letter Of Intent Unveiled

ANKARA - Turkey's economic program backed by International Monetary Fund (IMF) continues to deliver on its central objectives.
The letter of intent and its annexes presented to IMF on October 31 on the sixth review was unveiled on Friday.
The letter of intent stressed that Turkey's economic program backed by International Monetary Fund (IMF) continued to deliver on its central objectives.
Buoyed by the completion of the fifth review and Turkey's ongoing structural reforms, market confidence had markedly improved, the letter of intent pointed out.
The letter of intent:
''-Foreign reserves build-up has been higher than projected and net international reserves are now positive for the first time under the program. Real sector performance has also continued to strengthen.
-Strong policy implementation is playing an important role in delivering these gains. We met all monetary performance criteria and indicative targets for end- September.
-To build on our success, we have formulated a strong macroeconomic framework and policy agenda for 2004.
-We are aiming for continued strong macroeconomic performance in 2004.
-We remain fully committed to our primary surplus target of 6.5 percent of GNP to support debt reduction and increase the resilience of the economy. We fully expect to meet this year's remaining fiscal targets.
-To facilitate achievement of our fiscal target, we have taken a number of measures.
-We will also press ahead with our fiscal structural reform program. We observed key program conditions on direct tax reform and public financial control legislation, which will help lay the groundwork for improved medium-term fiscal performance.
-We are taking steps to ensure that the next phase of social security reforms does not conflict with our broader fiscal goals.
- We will further improve the transparency of the public sector accounts.
- Draft state enterprise governance legislation, for which Parliamentary passage is a structural benchmark for end-December 2003, is in the consultative process stage.
- In order to broaden the tax base, we have requested technical assistance from the Fund to identify ways of bringing the informal economy into the tax net. Building on this work, we intend to upgrade our revenue collection through new tax administration reform legislation, which will be prepared by end-January and is expected to be passed by Parliament by end-March.
-Central Bank's monetary policy will remain focused on achieving the inflation target-20 percent by the end of this year and 12 percent by the end of 2004.
-We remain committed to the floating exchange rate regime.
-We recently reached agreement with the U.S. authorities on a financial package totaling 8.5 billion U.S. dollars.
-We are pressing ahead with our reforms to strengthen the banking system.
-The BRSA's independence is being strengthened.
-The oversight committee for Yapi Kredi has published its first report.
-The Pamukbank sales process will be brought to a close before end-December 2003.
-We have started to implement a plan for compensating eligible depositors at Imar bank.
-Preparations for the sale of Vakif are progressing.
-The privatization of Ziraat and Halk is being delayed until a decision has been made on the resolution of Pamuk and Vakif.
-Financial transaction taxes will be further lowered to support bank intermediation.
-We are also taking other necessary measures to reform the banking system and to strengthen the supervisory framework
-To further increase the role of the private sector in the economy, we expect to complete soon the privatization of key SEEs.
-We are also continuing to improve the business climate in Turkey.''
(BRC-Öª-AÖ) 19.12.2003