* Bonds close off morning peaks
* Medium-term economic plan sheds doubt on IMF deal
* Stocks fall off intraday high, banks seen strong
(Adds closing prices, quote)
By Thomas Grove
ISTANBUL, Sept 16 (Reuters) - Turkish markets closed below morning highs on Wednesday after the government announced a medium term economic plan that shed more doubt on the country's intentions to sign a deal with the International Monetary Fund.
The May 11, 2010, bond <0#TRTSYSUM=IS> closed at 9.10 percent, off a low of 9.08 percent earlier in the morning.
The benchmark yield has seen a series of successive record lows as the central bank's monetary policy committee rate-setting meeting approaches and bonds were boosted by news on Wednesday that the government was set to lay out its economic plan for the next three years.
However, soaring budget deficit estimates released in the government plan gave investors reason to believe Ankara had less intention to sign up to an IMF deal to meet it foreign financing needs.
Turkey's last $10 billion IMF deal expired last year and markets have been on tenterhooks over the prospect of another deal.
"There are not a lot of positive signals in the programme overall and it looks more likely that we're not going to have an IMF programme," said Oyak Securities Economist Mehmet Besimoglu.
"I think it's very unlikely, because he clearly stated that there will be a primary deficit in the budget in 2010," he said.
Economy Minister Ali Babacan said on Wednesday that government expected a budget deficit of 62.8 billion lira in 2009 and 50 billion lira in 2010. The government also changed its 2009 GDP expectation to include a 6 percent contraction for the year.
The lira
BANKS GOING STRONG
The ISE National 100 share index <.XU100> closed up 1.68 percent at 46,680, off of an earlier high of more than 2 percent. But banking shares <.XBANK> were still strong, up 2.05 percent on expectations of a rate cut on Thursday when the Central Bank's Monetary Policy Committee meets.
"We are now above 46,000 and the rise -- especially with banks -- will continue. Banks are still the darling of the market because of the rate cut expectations," Nalan Ozdemir, head of research, Metro Invest.
Top traded Garanti bank
A Reuters poll of 20 economists forecast the central bank's monetary policy committee will cut its benchmark borrowing rate by 50 basis points (bps) to 7.25 percent at its monthly meeting on Thursday, bringing total easing since November to 950 bps. [ID:nLB109397]
Data released on Wednesday showed that consumer confidence fell 1.29 percent month-on-month to 81.30 points in August.
In July, the index fell 3.40 percent to 82.37 points in what was its first fall this year after rising steadily since hitting a low of 68.88 points in November 2008. (Reporting by Thomas Grove; Editing by Ruth Pitchford and Toby Chopra)