LONDON, Sept 17 (Reuters) - Turkey's chances of luring back flows of private sector money vital to the country's economic reforms have receded further after last week's U.S. terror attacks, analysts said on Monday.

     Although the worsening global outlook in the wake of the attacks may boost Turkey's chances of gaining international support, failure to woo funds from the private sector would imperil any sustained financing for the ailing country.

     Speaking on Monday before he flew to London at the start of a roadshow to sell the Turkish investment story to overseas fund managers and analysts, Economy Minister Kemal Dervis reminded the West of Turkey's strategic importance.

     However, he said there were no plans to tap again the International Monetary Fund with which Turkey has a $15.7 billion rescue pact, which brokers say could be blown off course if conflict in the region erupts.

     Dervis illustrated the fragility of private investor confidence when he announced Turkey was cancelling an attempt to access international markets via a bond issue.

     This was not a great surprise given edgy market conditions, but it came on the back of a delay to a key foreign bank investment that rattled investors.

     ``The capital account is key, and the financing picture requires foreign direct investment and re-entry to capital markets,'' said UBS Warburg emerging market analyst Alex Garrard.

     Italy's IntesaBCI said it was still reviewing an investment in Turkey's Garanti Bank as a result of the deterioration in the global outlook.

     Concerns over Turkey's ability to gain investment through 2002 drove the lira to a new low against the dollar at 1,550,000 to the U.S. unit and yields on domestic bonds ratcheted higher, while Turkey's dollar denominated debt hit one month lows, with the key 30-year Eurobond lost 2.67 percent of its face value to trade at 77.625 percent of face value.

     Shares plunged in excess of 10 percent.

     Analysis from ING Barings shows that Turkey has a sovereign refinancing requirement from now to March 2002 with payments of almost $2.2 billion falling due on bonded debt.

     ``In situations where risk appetite is damaged, weak credits tend to suffer most in terms of market access. Turkey currently has a low B- debt rating from S&P with a negative outlook,'' said Philip Poole, head of emerging Europe research in a report.

     MULTILATERAL SUPPORT DOESN'T COUNT FOR MUCH

     Even if there is more support from the IMF or from bilateral agreements for Turkey, analysts say that investor confidence is in such short supply that any funding package would have to be truly massive to make any difference.

     Interest rates are in excess of an inflation adjusted 30 percent, a level which makes it impossible for Turkey to keep on refinancing its debt, of which some $24 billion of domestic debt is due this year alone.

     ``Turkey's current predicament is much less about official creditors walking away than it is a crisis of domestic confidence, particularly in the lira, and the man in the street is unlikely to be thinking along such sophisticated lines about the IMF's role in the country,'' Garrard said.

     Analysts say talk of a kind of ``war dividend'' for Turkey in the form of international financial support was overblown in any case.

     The country would be hit harder by any rise in oil prices, decline in tourism and risk aversion which would imperil its ability to raise money in markets which would far outweigh extra official support.

     ``While the U.S. will of course be keen to avoid a financial meltdown in Turkey ... this does not stand in the way of economic and financial reality for the country, for which the suggestion that a broader regional conflict would be a material 'positive' is absurd,'' Garrard said.
^ REUTERS@