2024-05-09 11:27:41
S&P Global Ratings has upgraded Turkey‘s long-term foreign and local currency ratings to “B+” from “B”. The ratings outlook is “positive,” says a press release from S&P, Day.Az reports with reference to Interfax.
“We expect that after the municipal elections in the country, the Turkish authorities will continue to persistently fight inflation by tightening monetary policy and gradual fiscal consolidation,” agency experts note.
S&P forecasts Turkey’s current account deficit to narrow over the next two years, along with easing inflation and slowing dollarization of the economy. At the same time, agency analysts believe that inflation rates in the country will remain double-digit until the beginning of 2028.
Turkey’s central bank is likely to keep its key interest rate at the current level of 50% until the end of 2024, S&P said.
“We may upgrade Turkey’s rating again if the country’s balance of payments continues to improve, inflation slows and domestic savings in Turkish lira rise, allowing the country to rebuild its foreign exchange reserves,” the agency said in a press release.
S&P may change Turkey’s ratings outlook to “stable” if pressure on the country’s financial stability or government budget increases, for example, if the weakening of the lira cannot be stopped, or if the authorities abandon measures to curb inflation.
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