Table 4. Turkey: Performance Criteria on Changes in Net International Reserves

(in millions of U.S. dollars)

	Floor on change in NIR 1/	Actual
Outstanding stock as of April 30, 2001:	3,860
May, 2001 (performance criterion)	-1,500	-838
June, 2001 (performance criterion)	-2,900	-3,059
July-August, 2001 (performance criterion)	-2,000	-1,370
September-October, 2001 (performance criterion)	-2,600	-304
November-December, 2001 (performance criterion)	-600	...

1/ The change is computed as the difference in NIR stocks between the beginning and the end of each period. Figures exclude potential carryover from previous period (see paragraphs 6 and 7 below) – these need to be included when measuring compliance with performance criterion.

1. Net international reserves of the Central Bank of Turkey (CBT) comprise its gross foreign assets excluding encumbered reserves less its gross international reserve liabilities plus the net forward position of the central bank, denominated in U.S. dollars. Encumbered reserves are reserves that are not readily available.

2. For the purpose of the program, gross foreign assets are all short-term foreign (convertible) currency denominated claims on nonresidents, monetary gold valued at the November 30, 2000 average London fixing market price of US$269.05 per troy ounce, foreign bank notes, balances in correspondent accounts, and any reserve position in the IMF. At present encumbered reserves consist of foreign asset holdings in accounts of the Turkish Defense Fund (amounting to US$426 million on November 30, 2000). The special Dresdner portfolio (amounting to US$898 million on November 30, 2000) is also encumbered, but is not subtracted from foreign reserves given the overlap with one-year foreign currency denominated liabilities (see below). Reserve assets as of November 30, 2000 amounted to US$19,428 million.

3. Gross international reserve liabilities include all foreign currency-denominated liabilities (or TL-denominated liabilities indexed to any exchange rate) with an original maturity of up to and including one year (including reserves against foreign currency deposits of the banking sector), claims from central bank letters of credit, overdraft obligations of the central bank, and liabilities arising from balance of payments support borrowing irrespective of their maturity. On November 30, 2000 reserve liabilities thus defined amounted to US$8,331 million.

4. The net forward position is defined as the difference between the face value of foreign currency-denominated central bank off-balance sheet (forwards, swaps, options, and any future contracts) claims on nonresidents and foreign currency obligations to both residents and nonresidents. As of November 30, 2000 these amounts were zero.

5. All assets and liabilities denominated in foreign currencies other than the U.S. dollar will be converted into U.S. dollars at the program cross rates specified.

6. The limits on the changes in net international reserves for June through end-October specified in the above table will be increased by either the unused portion of the limit on the change in net international reserves from the previous period, or by 25 percent of the limit during the current period, whichever is less.

7. The limits on the changes in net international reserves for end-December and subsequent periods specified in the above table will be increased by the unused portion of the limit on the change in net international reserves from the previous period.

8. The change in net international reserves will be evenly distributed within each period.