www.eurasianet.org/departments/business/articles/eav032 -
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Published on: 3/28/2003
Last Visited: 4/14/2008
In a March 26 conference call with investors, Fitch Ratings' lead Turkey analyst Nick Eisinger said the next several months would be suspenseful times for investors.Without the expectation of the American $30 billion, he said, "the margin for error has become very, very limited indeed."
The short duration of many domestic loans leave the treasury "vulnerable to adverse market sentiment," Eisinger said.If investors become pessimistic, Fitch analysts have calculated that a sudden increase in interest rates, combined with a worsening of the Turkish lira's exchange rate, could create a gap of $9 billion to $16 billion between what Turkey owes and what it has on hand.
Eisinger stressed that Fitch expects the government to "muddle through" the current crisis without defaulting on debts.
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Eisinger of Fitch Ratings said that Erdogan's team seems "serious" about complying with IMF demands on privatization and government efficiency.However, with Turkey due to pay at least $9 billion back to the fund by 2005, investors and officials want to see concrete changes before feeling secure that the IMF will remain a funding source."We have yet to see any shred of evidence that Turkey has taken ownership of its IMF program," Eisinger told investors on March 26.
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Eisinger shared that sentiment: "Banks continue to be willing to fund the government," he said.