International credit rating agency Moody’s has upgraded Turkey’s credit rating to B1 from B3 and has kept its outlook positive.
The positive outlook reflects a balance of risks skewed to the upside, while the upgrade of the rating is due to the improvements in governance, more specifically the return to orthodox monetary policy. Moody’s noted that inflationary pressures could ease significantly in the coming months and into 2025 as inflation and local demand begin to moderate.
According to the statement, the Central Bank of Turkey is rapidly enhancing the credibility of monetary policy, which in turn is helping to restore confidence in the Turkish lira. Moreover, the tight policy stance is already materially reducing Turkey’s elevated external vulnerability.
