Rating time has come for the Turkish economy. Fitch Ratings was the first to announce its review. Contrary to the expectation that it would downgrade either the country’s credit rating or outlook, the agency kept both unchanged: the “stable” outlook and the BBB-investment grade.
The review, announced late Oct. 3 on the eve of Eid al-Adha, was expected to send the financial markets rallying. But when the markets reopened Oct. 8 after the holiday, the good news from Fitch was overshadowed by Kurdish demonstrators wreaking havoc across the country. Heeding a call by the Kurdistan Workers Party (PKK) and its political extension, the People's Democracy Party (HDP), thousands took to the streets Oct. 7 to protest the Islamic State’s (IS) attack on Kobani, with the ensuing violence resulting in dozens dead and hundreds injured. The wave of violence came as a shock for the stock market, foreign exchange rates and interest rates. The main index of the Istanbul stock exchange shed 1,400 points in a single day, plunging to a five-month low of 72,943 points. The Turkish lira, which had been expected to gain ground, slid to 2.29 against the dollar, while bond yields reached 9.78%.
