The U.S.-based credit ratings agency Standard & Poor’s (S&P) affirmed Turkey’s credit rating at B and upgraded its outlook from negative to stable.
The agency said the stable outlook reflects balanced risks on Turkey’s creditworthiness after a return to orthodox monetary policy settings as the Central Bank hikes the policy rate.
“To disinflate and de-dollarize the economy, the Central Bank, under new leadership, has raised the key one-week repo rate by 21.5 points since June, to 30%. To offset fiscal deterioration, the Treasury has introduced indirect taxes,” the global rating agency said.
The agency said it could revise Turkey’s outlook to positive if the effectiveness and independence of monetary and financial sector policies improved while Turkey’s balance-of-payments position strengthened, particularly the Central Bank’s net FX reserves.
