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Cablegate: Turkish Markets Cob March 19: Limited Further

Published: Wed 19 Mar 2003 05:05 PM
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS ANKARA 001780
SIPDIS
SENSITIVE
STATE FOR E, P, EB/IFD AND EUR/SE
TREASURY FOR OASIA - MILLS AND LEICHTER
NSC FOR QUANRUD AND BRYZA
E.O. 12958: N/A
TAGS: EFIN ECON PREL TU
SUBJECT: TURKISH MARKETS COB MARCH 19: LIMITED FURTHER
DECLINE; EMBASSY AND GOT STATEMENTS
1. (U) After falling significantly in the morning, Turkish
markets declined only slightly in the afternoon session, as
investors struggled to figure out whether some kind of U.S.
assistance package might still be possible. At market
closing, the lira had weakened to TL 1,695,776/dollar, while
the yield on the benchmark t-bill had risen to 66.05 percent.
The stock market fell 6.1 percent for the day.
2. (SBU) At the GOT's request, Embassy released a press
release in mid-afternoon (using text of Washington-approved
press guidance), which stated:
"Turkey has made impressive progress over the past two years
in stabilizing and reforming its economy, as evidenced by the
strong economic recovery. The policy framework makes
Turkey's economy more resilient and more likely to achieve
sustained growth. We have confidence in the Turkish
government's commitment to strong economic policies, and have
every expectation they will continue them, working with the
IMF, which we welcome. This program, if fully implemented,
will lead to further strengthening of the Turkish economy.
The U.S. government has supported Turkey's IMF and World Bank
programs and will continue to do so as long as Turkey
continues to implement strong economic policies."
3. (U) The Embassy distributed the press release just as
Prime Minister Erdogan was announcing that he expected such a
statement by the end of the day. A few minutes earlier,
State Minister Babacanent had announced that: "There is
always agreement that the United States will give strong
support to Turkey. Apart from that, there is nothing and it
is not possible to say anything more now."
4. (U) The Embassy press release has been running as the top
story in the local press over the past few hours, with some
TV channels welcoming it as a statement of support and others
expressing disappointment because it indicated U.S. support
would be verbal only.
5. (SBU) Bender Securities' Murat Gulken told us tonight
that markets had not reacted significantly to these public
indications that there would be no U.S. package because "the
fog (i.e., confusion) was so thick, it will take more than an
hour to clear." He predicted further market declines
Thursday as the absence of a package sinks in.
PEARSON
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