1/30/2017
Fitch and S&P Updated Turkey’s Credit Note
S&P has affirmed Turkey’s long-term foreign credit rating at 'BB', and the credit rating in terms of local currency at ‘BB+’ and has revised its outlook for Turkey's sovereign credit rating to negative from stable.
Fitch Ratings on the other hand has downgraded Turkey’s long-term foreign credit rating another step down from ‘investible’ level…
The international credit rating agency Standard & Poors (S&P) has affirmed the country’s long-term foreign credit rating at 'BB', and the credit rating in terms of local currency at ‘BB+’ and has revised its outlook for Turkey's sovereign credit rating to negative from stable. S&P downgrades the growth estimate for Turkey to 2.4 percent from 3.2 percent According to a disclosure made by S&P, it is stated that the monetary policy is not responding to currency and inflationary pressures in a sufficient manner, which could weaken the financial strength of Turkey's companies and banks, undermining growth. The disclosure including the statement that the Turkish economy narrowed by 1.8 percent in the second quarter of last year, also states that the economy is estimated to have grown by around 2 percent in 2016 and that the economic growth is foreseen to grow by 2.4 percent this year. S&P had disclosed that the Turkish economy was expected to grow by 3.2 percent this year in an earlier estimate made for the growth rate for 2017. Fitch Ratings has downgraded Turkey’s long-term foreign credit rating another step down from ‘investible’ level The international credit rating agency Fitch Ratings has downgraded Turkey’s long-term foreign credit rating another step down from ‘investible’ level, retaining the outlook as stable. The credit rating has thus been downgraded to BB+ from BBB- putting Turkey at the same level as Azerbaijan, Bahrain and Portugal. Reminder is made in the disclosure of Fitch Ratings that the growth rate fell sharply in the second half of 2016 in Turkey. It is stated that a leap was expected following a narrowing of 1.8 percent in the 3rd quarter of 2016 but it was expected that this leap would remain at low levels due to security issues and political conditions besides a weak domestic demand as a result of a loss in the value of local currency in the short term. The disclosure is also quoted as: “Developments in the political arena and security issues weakened the economic performance and corporate independence. The action taken by the Government on establishing a system of a Presidency with executive powers will bring forth a system where control and balances are weakened if these efforts yield a successful outcome.” As will be recalled, Moody’s downgraded Turkey’s credit rating in September 2016 to a level which is below investible TEBA:September 29, 2016
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