S&P lowers Turkey’s credit rating with stable outlook

Wednesday, 02 May 2018 15:53:48 (GMT+3)   |   Istanbul
       

International credit rating agency S&P Global Ratings (Standard & Poor's Ratings Services) has announced that it has lowered its unsolicited foreign currency long- and short-term sovereign credit ratings on Turkey to 'BB-/B' from 'BB/B'. The outlook is stable.

According to S&P’s statement, the downgrade of Turkey’s credit rating reflects S&P’s concerns over a deteriorating inflation outlook and the long-term depreciation and volatility of the country’s exchange rate, notwithstanding the central bank's recent decision to hike its late liquidity window rate. The rating action also reflects the credit rating agency’s concerns over Turkey's deteriorating external position and rising distress in the externally leveraged private sector.

Meanwhile, S&P stated that the stable outlook on Turkey balances risks from what it sees as an overheating economy and growing macroeconomic imbalances, namely a deteriorating current account and fiscal deficit and a weaker exchange rate and inflation outlook over the next 12 months, against the buffer provided by still low general government debt.


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