An IMF team was scheduled to arrive in Turkey on 6 October for policy consultations, as the government was putting the final touches to its 1998 budget and economic programme.

The IMF is said to be pressing for the government to tighten up its fiscal and monetary policies in the context of a short-term programme backed by a standby credit. The government has argued that this is unnecessary because Turkey is not undergoing a serious foreign exchange crisis. However, officials have said they might consider a standby programme, if the IMF provided increased funds to back it.

Prime Minister Mesut Yilmaz said on the weekend of 26-28 September that Turkey needed about $10,000 million in external funding to add flexibility to the financial system. Yilmaz noted the country had external and internal debt burdens respectively of about $80,000 million and $30,000 million. Yilmaz said domestic debts had to be replaced with external debts to lower the overall interest payment burden.