ISTANBUL (Reuters) - Turkish Prime Minister Tayyip Erdogan said on Saturday he did not completely rule out an International Monetary Fund-backed fiscal reform bill that reins in the public spending. Erdogan, however, told a news conference that the reforms adoption has been postponed for now as it would create problems over new investments by the public sector. Turkey has postponed the fiscal rule legislation, which is designed to reduce the budget deficit and debt-to-GDP ratio, in a move dashing investor expectations that it would be introduced in time for the 2011 budget. Rating agencies have warned that the delay may result in deficit reduction plans being diluted. We are not completely ignoring the fiscal rule, but the fiscal rule almost operates like a domestic IMF. We have postponed its adoption and it could be passed later, Erdogan said. Turkeys markets initially fell in early August when government ministers announced postponement of the reform bill because this could signal loose spending ahead of parliamentary elections in mid-2011, The markets later recouped their losses after budget data continued to show high tax revenues as the economy recovers strongly from last years recession and voters approved a EU-backed package overhauling the constitution. The pm said he believed the lira currencys value very satisfactory amid a debate between exporters and the central bank whether the current floating exchange rate regime curbs Turkish firms competitiveness. The market itself determines the liras level under the floating exchange rate regime and it is at a very satisfactory level. A fixed exchange rate regime would disrupt the economy, Erdogan said. The Turkish currency hit a five-month high this week against a broadly retreating dollar but later eased when the central bank raised banks reserve requirements and soak up liquidity from the market including $1.5b forex. However, Erdogan said in an apparent gesture to exporters that the central banks interest rates were too high and should be cut further. The bank has dismissed past calls for lower rates by the govt and it sets monetary policy at its own discretion. The Turkish central bank left its benchmark one-week repo rate at 7pc in its most recent meeting on Sept 16, while cutting its overnight lending and borrowing rates by 25 basis points.