WASHINGTON - The International Monetary Fund said Thursday it had reached a preliminary deal with Turkey allowing the country to access billions of dollars in standby credit.
The agreement reached by an IMF staff mission is in principle and still has to be approved by the Fund's executive board next month, officials said.
The team visited Turkey last month to review its progress under a 10-billion-dollar arrangement with the IMF, which has been worried about a potential spending splurge by the government ahead of elections.
"Elections have their own dynamics," IMF managing-director Rodrigo Rato told a news conference, noting that politicians' spending promises are a feature of every democratic society.
But he stressed: "Overall strategy has to be kept in mind by (Turkish) policymakers."
Turkey and the IMF signed the 10-billion-dollar standby deal in May 2005 to replace an earlier three-year program that had saved the country from the brink of financial collapse. The current deal expires in May 2008.
Rato said that Turkey's recovery was one of the IMF's leading "success stories."
The Turkish government has now assured the IMF of how much it will secure from state-owned enterprises to help meet the Fund program's 2007 fiscal targets, officials said.
Once approved, the deal will give Turkey access to some of the rest of the 4.4 billion dollars that it has yet to tap from the IMF package.
Turkey is set to hold a presidential election next month, followed by general elections in November.
04/12/2007 17:11 GMT