Global credit rating agency Moody’s said in a statement on Friday that it had slashed Turkey’s sovereign debt rating by one notch to “B3” from an earlier “B2,” while the New York City-based American rating agency also had underscored further risks for an inflation-hit Turk economy ahead.
However, Moody’s had raised Turkey’s credit outlook to stable from negative, reflecting a balance of trade in progress for the long-hailed economy. Over the second quarter of the year, Turk economy had witnessed an inflation-surge of as much as 76 per cent compared to the same time a year earlier, while its currency has been depreciating sharply.
Turk Consumer Prices index is expected to hit a whacking 80.9 per cent by year-end. On top of that, Moody’s added that its latest move to trim Turk’s credit rating by one notch was mostly galvanized by a worrisome increase in payment pressure alongside a decline in the country’s foreign currency reserve.
Turkey had to engulf a sharp squeezing at its foreign remittances during the pandemic-led restrictions, that had reportedly battered the economy’s tourism industry alongside its stance as an aviation hubspot.
Moody’s slashes Turkey’s credit rating to “B3”
Meanwhile, expressing concerns over Turkey’s current account deficit, Moody’s said in a statement, “(The) current account deficit will likely exceed earlier expectations by a wide margin, raising external financing needs at a time of tightening financial conditions globally”.
Nonetheless, Turkey’s hefty military budget that soared to a whopping $7.29 billion last year alongside its trade-row over US regarding purchase of Russian S-400 missile system, added to further strain, suggested analysts.