TURKEY: Fresh measures to curb inflation

29 September 1995

The government in the week ending 15 September added several measures to a monetary programme aimed at curbing a late-summer upturn in inflation fuelled by rapid economic expansion (MEED 22:9:95).

The latest measures using special levies for the Resource Utilisation Support Fund (KKDF) included:

p hiking KKDF deductions from consumer loans by 4 percentage points to 10 per cent

p categorising the export of capital market instruments abroad such as bills, commercial bills and asset-backed securities as 'loans' subject to a 6 per cent KKDF deduction along with short-term foreign borrowings.

These measures complemented others introduced by the central bank from early September after consultations with the IMF (MEED 22:9:95).

The background to these measures is a rise in inflation to about 90 per cent, following rapid economic growth in the second quarter of the year. Imports rose by 44 per cent in the first six months of 1995, compared with January-June 1994, helping to push the trade deficit up by 90 per cent to $4,954 million.

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