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Turkey: Investors ‘unconcerned' over IMF

Thursday, March 11, 2010

The possibility that Turkey will not sign a standby deal with the International Monetary Fund will not affect the markets in the short term, an investors' association spokeswoman has said.

"In the short term, there will not be any significant effect," said Piraye Antika of the International Investors Association, or YASED.

Speaking Wednesday at a press conference in Istanbul, she said the reason for the non-deal was that markets had already priced the prospect into their budgets. However, she said that in the long term, Turkey had lost its main support. "In case of market volatility, there will be no support. We have to create our own support, particularly in financial markets. We need [fiscal] discipline," she said. "If we have such discipline and regulation, those would substitute for an IMF agreement."

Revealing the latest Barometer survey results, Antika said political instability is the main concern of investors. The survey showed that the top potential problem for foreign investors for the next six months is "political instability," followed by "global economic fluctuations," "local economic fluctuation" and the "probability of an early election."

Nearly 57 percent of those surveyed said issues over legal framework and the enforcement of laws is the main barrier in front of foreign investment, followed by the unregistered economy at 46 percent and by issues over taxes and incentives at 45 percent. These top three concerns were followed by worries over political instability, economic instability, red tape, intellectual property rights and corruption.

Meanwhile, the YASED Investors Expectation Index, or IIEI, stood at 70.01 as of the first quarter of the year. The index started during the first quarter of 2002 at 100.

Source: Hurriyet.com

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