Table 4. Turkey: Performance Criteria on the Net Domestic Assets of the Central Bank of Turkey (in trillions of Turkish Lira)

Table 4. Turkey: Performance Criteria on the Net Domestic Assets of the
Central Bank of Turkey (in trillions of Turkish Lira)

	Ceilings	Actual
Outstanding NDA as of April 30, 2001:	6,739
May 31, 2001 (performance criterion) 1/	9,750	7,942
June 30, 2001 (performance criterion) 1/	13,250	12,943
August 31, 2001 (performance criterion, revised) 1/	17,250
October 31, 2001 (performance criterion, revised) 1/	21,150
December 31, 2001 (indicative ceiling, revised) 1/	22,400

1/ The compliance with the performance criterion (indicative target) shall be based on the average of the stocks prevailing during the five working days including and immediately preceding each of these dates.

1) The performance criteria and indicative ceilings on net domestic assets and base money have been revised. New targets are given in Tables 4 and 4a, which replace Tables 4 and 4a of Annex D of the June 26, 2001 LOI.

2) The net domestic assets (NDA) of the Central Bank of Turkey (CBT) are defined as base money less the net foreign assets of the CBT valued in Turkish lira at end-month actual exchange rates.

3) Base money is defined as currency issued by the CBT, plus the banking sector's deposits in Turkish lira with the CBT. Indicative ceilings for base money are shown in Table 4.a below.

4) Net foreign assets of the CBT are defined as the sum of the net international reserves of the CBT (as defined in Annex F of the May 3 MEP), medium-term and long-term foreign exchange credits (net), and other net foreign assets (including deposits under the Dresdner scheme of original maturity of two years or longer and the holdings in accounts of the Turkish Defense Fund, but excluding CBT's net lending to domestic banks in foreign exchange. As of March 31, 2001, net foreign assets of the CBT amounted to TL 9,012 trillion.

5) The cumulative net change in the devaluation account from its balance at end-1999 (excluding any distribution of unrealized foreign exchange profits, in cash or through the write-off of government paper held by the CBT, since end-March 2001) will be subtracted from end-period NDA stock as defined above. The balance of the devaluation account at end-March 2001 was TL-1,380 trillion.

6) NDA ceilings will be adjusted for any change in the definition of the aggregate to which the reserve requirement applies according to the following formula:

D NDA=R*D B,

where: R denotes the 4 percent reserve requirement plus the 2 percent liquidity requirement coefficient and DB denotes the change in base generated by a change in the definition of the reserve aggregate. The averaging period will not be changed during 2001.

7) NDA ceilings will be adjusted for any change in the reserve requirement coefficient according to the following formula:

D NDA=B*D R,

where: B is the level of the base to which the reserve requirement applies on the test date and ?R is the change in the reserve requirement coefficient and the liquidity requirement coefficient.

8) The NDA ceilings will be adjusted downward for any waiver of reserve requirements for any additional bank intervened by the BRSA. The adjustment will be equal to the existing reserve requirement coefficient times the amount of liabilities at these banks subject to reserve requirements.

Table 4a. Turkey: Indicative Ceilings for the Monetary Base of the Central Bank of Turkey (in trillions of Turkish Lira)

	Ceilings	Actual
Outstanding base money as of April 30, 2001	5,850	5,850
May 31, 2001 (indicative ceiling) 1/	5,900	5,815
June 30, 2001 (indicative ceiling) 1/	6,050	6,247
August 31, 2001 (indicative ceiling, revised) 1/	7,175	...
October 31, 2001 (indicative ceiling, revised) 1/	7,550	...
December 31, 2001 (indicative ceiling, revised) 1/	7,750	...

1/ These ceilings shall be based on the average of the stocks prevailing during the five working days including and immediately preceding each of these dates.