Keep Us Strong WikiLeaks logo

Currently released so far... 64621 / 251,287

Articles

Browse latest releases

Browse by creation date

Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z

Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Browse by classification

Community resources

courage is contagious

Viewing cable 03ANKARA6448, TURKEY REACHES AGREEMENT WITH IMF STAFF ON SIXTH

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs

Understanding cables
Every cable message consists of three parts:
  • The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
  • The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
  • The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
To understand the justification used for the classification of each cable, please use this WikiSource article as reference.

Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #03ANKARA6448.
Reference ID Created Released Classification Origin
03ANKARA6448 2003-10-15 15:38 2011-08-24 01:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Ankara
This record is a partial extract of the original cable. The full text of the original cable is not available.

151538Z Oct 03
UNCLAS ANKARA 006448 
 
SIPDIS 
 
 
SENSITIVE 
 
 
STATE FOR E, EB/IFD, AND EUR/SE 
TREASURY FOR OASIA - MMILLS AND JLEICHTER 
NSC FOR BRYZA AND MCKIBBEN 
 
 
E.O. 12958: N/A 
TAGS: EFIN ECON TU
SUBJECT: TURKEY REACHES AGREEMENT WITH IMF STAFF ON SIXTH 
REVIEW, CENTRAL BANK CUTS RATES 
 
 
REF: A. ANKARA 6422 
     B. ANKARA 6342 
     C. ANKARA 6269 
 
 
 1. (SBU) SUMMARY: THE IMF STAFF AND THE GOT ANNOUNCED 
AGREEMENT TODAY ON A LETTER OF INTENT FOR THE SIXTH REVIEW. 
TO MEET THE FISCAL TARGET, THE GOT OPTED TO RAISE TAXES ON 
AUTOS AND ALCOHOL. THE CENTRAL BANK CUT ITS OVERNIGHT 
BORROWING RATE 3 PERCENTAGE POINTS. THE TIMING OF THE RATE 
CUT ON THE SAME DAY THE IMF AGREEMENT WAS ANNOUNCED WAS 
PROBABLY NOT A COINCIDENCE AS THE BANK HAS WANTED TO KEEP 
PRESSURE ON THE GOT TO UNDERTAKE REFORMS. BECAUSE BOTH EVENTS 
WERE LARGELY PRICED IN, 
THE MARKET RALLY WAS MODEST, THOUGH BENCHMARK INTEREST RATES 
DROPPED BELOW 30 PERCENT BEFORE CLOSING AT 30.01 PERCENT. 
POST WILL FOLLOW UP WITH GOT AND IMF OFFICIALS FOR MORE 
DETAILS. END SUMMARY. 
 
 
GOT AND IMF ANNOUNCE AGREEMENT ON LETTER OF INTENT: 
--------------------------------------------- ----- 
 
 
2. (SBU) AT A JOINT PRESS CONFERENCE OCTOBER 15 
STATE MINISTER BABACAN AND IMF MISSION CHIEF REZA MOGHADAM 
ANNOUNCED THAT THE GOT AND FUND STAFF HAD REACHED AGREEMENT 
ON A LETTER OF INTENT, PAVING THE WAY FOR THE FUND STAFF TO 
PRESENT THE SIXTH REVIEW TO THE IMF BOARD IN EARLY NOVEMBER. 
BABACAN'S AND MOGHADAM'S COMMENTS AT THE JOINT PRESS 
CONFERENCE SUGGEST THAT THE AGREEMENT IS ALONG THE LINES 
DESCRIBED BY RESIDENT REPRESENTATIVE ODD PER BREKK IN REF A. 
 
 
3. (SBU) TO ATTAIN THE 6.5 PERCENT PRIMARY SURPLUS FOR 2003, 
BABACAN REFERRED TO MEASURES WORTH 0.3 PERCENT OF GDP. WE 
UNDERSTAND THESE INCLUDE INCREASES IN THE SPECIAL CONSUMPTION 
TAX FOR AUTOS AND ALCOHOLIC BEVERAGES, WHICH WERE ANNOUNCED 
YESTERDAY. THE GOT ALSO ANNOUNCED CIVIL SERVANTS WOULD 
RECEIVE PAY INCREASES IN 2004 OF 13.8 PERCENT-- 
HIGHER THAN THE 12 PERCENT 2004 INFLATION TARGET BUT BELOW 
WHAT MEDIATORS HAD PROPOSED TO RESOLVE THE IMPASSE BETWEEN 
THE GOT AND PUBLIC SECTOR LABOR UNIONS. THE UNIONS HAVE 
CALLED A NATIONWIDE PROTEST OVER THE ISSUE FOR OCTOBER 18. 
THE BUDGET MUST BE SUBMITTED TO PARLIAMENT BY OCTOBER 17. 
 
 
4. (U) AT THE PRESS CONFERENCE BABACAN ALSO REFERRED TO THE 
NEED TO PASS THE PUBLIC FINANCIAL MANAGEMENT AND CONTROL LAW 
AND THE LAW STRENGTHENING THE BRSA. 
 
 
CENTRAL BANK CUTS RATES: 
----------------------- 
 
 
5. (SBU) ALMOST SIMULTANEOUSLY, THE CENTRAL BANK ANNOUNCED IT 
HAD CUT OVERNIGHT BORROWING RATES BY 3 PERCENTAGE POINTS 
FROM 29 PERCENT TO 26 PERCENT. THE BANK CUT OVERNIGHT LENDING 
RATES 4 PERCENTAGE POINTS 
FROM 35 PERCENT TO 31 PERCENT. THE TIMING WAS PROBABLY NOT A 
COINCIDENCE 
AS THE CENTRAL BANK HAS BEEN KEEN TO KEEP PRESSURE ON THE GOT 
TO UNDERTAKE REFORMS. THE MARKET HAS BEEN EXPECTING THE BANK 
TO CUT RATES SINCE THE LARGE RALLY OF OCTOBER 6 (REF C). 
 
 
RALLY MODEST BUT BENCHMARK BRIEFLY UNDER 30 PERCENT: 
--------------------------------------------- ------ 
 
 
6. (SBU) TURKISH FINANCIAL MARKETS HAD LARGELY EXPECTED 
AND PRICED IN THE IMF AGREEMENT AND CENTRAL BANK RATE CUTS. 
CONSEQUENTLY 
TODAY'S RALLY WAS RELATIVELY MODEST WITH THE LIRA ONLY 
IMPROVING SLIGHTLY TO 1,409,422 FROM 1,416,020 PER DOLLAR, 
ALTHOUGH THE IMKB 100 STOCK MARKET INDEX ROSE 2.32 PERCENT TO 
15,371.63. THE YIELD ON THE BENCHMARK TREASURY BILL MATURING 
AUGUST 18, 
2004 DROPPED BELOW 30 PERCENT DURING THE DAY--THE LOWEST 
LEVEL SINCE BEFORE THE 2001 CRISIS--BUT CLOSED AT 30.01 
PERCENT. 
EDELMAN