Turkey

After over a year of strong gains by Turkey's currency against the US dollar, last week saw business perhaps return to usual on the Istanbul markets, with the Turkish lira (TL) once again on the slide. However, while political uncertainties caused by a row over education reform may have added to analysts' risk calculations, it was largely straightforward financial and economic factors that were decisive in the new forex movements.

When Turkey's finances crashed dramatically back in February 2001, intervention by the IMF was widely seen as having saved the day for the country's battered economy. Yet now - three years and around $18bn later - the Fund may be about to find itself nowhere near as welcome in the corridors of political Ankara.

While market watchers are now looking back at 2003 as something of a non-starter for Turkey's real estate and construction sectors, there are now signs that 2004 could yield some more positive developments. With prices stabilising, the forecast now is for a steady increase in the months ahead, with several areas likely to see more significant growth.

With a good new crop of statistics in this week on the state of the nation's economy, there was also some focusing on the state of the nation's banks. This came in on the back of news of an important merger, and of some more worrying news from a previously welcomed share bid.

In a week of pregnant pauses, while the nation awaited the outcome of Sunday's local elections and a new round of negotiations on Cyprus, the government's privatisation strategy also looked to be imminent, if not yet actual. Delays in formulating strategies were compounded too by news that the body set up to sell off Turkey's state industries - thereby helping save the country from penury - was itself substantially in debt.

Turkey's troubled telecoms privatisation took what appeared to be one step forwards and one step back this week, as a delay in the tendering process was balanced by some more positive news on the size of the stake on offer.