The rating agency Moody’s confirmed Turkey’s creditworthiness, citing the improved position of its reserves and the lower current account deficit.
The house maintained Turkey’s long-term rating of “B2”, which is non-investment and subject to high credit risk.
Moody’s has also maintained a negative outlook for the country due to the unpredictable policies of Turkish President Recep Tayyip Erdogan.
“Despite the current pressure on the currency, Turkey’s fundamental external risk of vulnerability has been reduced due to the lower current account deficit, which supports the gradual restructuring of foreign exchange reserves on a gross and net basis,” Moody said on Friday.
Turkey’s current account deficit fell by more than half compared to a year earlier, to about $ 18.4 billion in the 12 months to September, compared to a $ 35 billion deficit in 2020. At the same time, foreign exchange The country’s reserves more than doubled to $ 79.6 billion on November 26, compared to the lowest level in September 2020.
Moody’s expects Turkey’s real gross domestic product growth to slow to about 4 percent in 2022 compared to the 11 percent growth rate forecast for this year.
“Despite the improvements, the decision to maintain the negative outlook mainly reflects the increased unpredictability, especially the central bank monetary policy which is the cause of exchange rate pressures and volatile international capital flows,” Moody’s said.
The current economic policy stance will also “lead to significantly higher inflation in the coming months, eroding household purchasing power and increasing the likelihood of a sharp slowdown in growth despite lower interest rates.”
Petros Kranias
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Source From: Capital
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