Will Turkey face another credit rating downgrade?
Fitch Ratings has warned of high risks in Turkey, sparking concern that the agency, the first to raise Turkey to investment grade back in 2012, may now be the first to downgrade the country.
Two days before Turkey’s Aug. 10 presidential elections, the Moody’s credit rating agency was due to issue its regular review of Turkey. Earlier assessments had prompted anticipation that the agency, which had raised Turkey to investment grade (Baa3) in May 2013, could now downgrade the country.
The government appeared unnerved. On Aug. 5, Economy Minister Nihat Zeybekci said, “I expect Moody’s decision to be negative rather than positive, for it will make a political assessment.”
The deputy chairman of the ruling Justice and Development Party (AKP), Salih Kapusuz, spoke of “certain attempts” to have Turkey’s rating lowered and said, “No one should seek to cast a shadow on the elections via certain foreign-based international institutions.”
Those premature reactions sparked questions of whether Moody’s review might have been leaked to the Turkish Treasury and Ankara already knew that a downgrade was in the pipeline. However, Deputy Prime Minister Ali Babacan, who oversees the economy, denied the government had received any such information.
