International credit rating agency Moody’s confirmed Turkiye’s credit rating as “B3” and changed its rating outlook from “stable” to “positive”.
Moody’s made an evaluation regarding the Turkish economy within the timetable.
In the statement made by the credit rating agency, it was reported that Turkiye’s credit rating was confirmed as “B3” and the rating outlook, which was previously “stable”, was increased to “positive”.
In the statement, it was stated that the main reason for the change in outlook to positive was “the decisive change in economic policy, in particular the return to orthodox monetary policy”.
It was emphasized in the statement that although headline inflation is likely to increase in the near term, there are signs that inflation dynamics have begun to change, and that this is an indication that monetary policy has regained its reliability and effectiveness.
In the statement, it was pointed out that monetary tightening also increases the possibility of reducing Turkiye’s large external imbalance and restructuring the foreign exchange reserves of the Central Bank of the Republic of Turkiye (CBRT), both of which will reduce the country’s vulnerability to external shocks.
It was stated in the statement that the decrease in the country’s external deficit is expected to accelerate further in 2024, and that the deficit is expected to be below $40 billion in total for the year.
In the statement, touching on the factors that may affect Turkiye’s credit rating, it was stated that the country’s rating could be increased if the current monetary policy stance is maintained after the upcoming local elections and there is evidence of a slowdown in growth, a decrease in inflation and a decrease in macroeconomic imbalances.
In the rating agency’s statement, it was stated that considering the positive outlook, it does not seem likely that the country’s credit rating will be lowered.
Moody’s made an off-calendar assessment of the Turkish economy on August 12, 2022 and updated the country’s credit rating to “B3” and changed the rating outlook to “stable”.
Later, the rating agency’s calendar included June 16 and December 15, 2023 for the evaluation of Turkiye’s credit rating, but no update was made on these days.
Source: Trthaber / Prepared by Irem Yildiz