Turkey’s Policy Shift on Track Despite Slower Disinflation, Election Test Awaits, S&P Says
S&P said lower rates and tighter policy support Turkey’s BB- rating, while more than 100 liquidated funds raised governance concerns.
- Global reports Turkey's tight monetary stance underpins its sovereign rating, though slower disinflation and the approach of elections will test the Central bank's commitment to discipline.
- Following lower-than-expected inflation data from last month, the Central bank reduced its key interest rate to 36% on Thursday, after holding the rate at 37% for five policy meetings.
- Karen Vartapetov, Global's sovereign analyst for Central and Eastern Europe and Turkey, stated, "Disinflation has been delayed, but we believe not derailed," with inflation currently just below 30% annually.
- Regulators liquidated more than 100 funds following manipulation allegations, as Global views the recent investment fund CRISIS as a GOVERNANCE ISSUES case rather than a broad-based financial stability threat.
- Global, whose assessment of Turkey broadly mirrors those of Fitch and Moody, will review Turkey's rating in April next year, Vartapetov said.
13 Articles
13 Articles
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Turkey's policy shift on track despite slower disinflation, election ...
Turkey’s policy shift on track despite slower disinflation, election test awaits, S&P says
By Ezgi Erkoyun ISTANBUL, Oct 23 (Reuters) - Turkey's tight monetary stance and shift away from unorthodox economic policies underpin its sovereign rating, but slower disinflation and the run-up to elections will test the central bank's commitment to m...
S&P Global's director responsible for Türkiye stated that Türkiye's orthodox economic policies implemented after 2023 continue to support its credit rating, adding that they are closely monitoring the slower-than-expected decline in inflation and the impact of the upcoming elections on economic policies.
Following the Turkish Central Bank's decision to lower interest rates to 36%, attention has turned to Scope Ratings. The agency, which has a review schedule for Turkey today, currently has a BB- rating with a stable outlook. The focus of the potential decision is on inflation and reserves. 🚆
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