Turkey’s credit rating was raised from B to B+ by the credit rating company Standard & Poor’s (S&P), which maintained a favorable outlook. In the context of external rebalancing, Turkey is anticipated to enhance coordination between monetary, fiscal, and income policies, according to a news statement issued by the agency.
“We forecast rising portfolio inflows and narrowing current account deficits over the next two years, alongside declining inflation and dollarization, although progress will be slow and reserve accumulation modest as the central bank limits depreciation of the Turkish lira,” stated the agency.
Additionally, it updated the transfer and convertibility assessment from “B+” to “BB-,” noting that there is less chance that the sovereign will restrict private sector borrowers from repaying debt denominated in foreign currencies. “We could raise the rating further should balance-of-payments outcomes continue to improve, inflation decline, and domestic savings in Turkish lira rise, leading to a rebuilding of the government’s usable foreign currency reserves,” it stated.
Source: DailySabah
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