Fitch downgrades Turkey’s long-term ratings to ‘B+’ from ‘BB-‘

Fitch has downgraded Turkey’s ratings to B+. Their prediction is negative. Analysts of the agency noted the factors that contributed to the approval of such a decision. Turkey continues to experience strong inflation, which is in double digits. In January, the national consumer prices showed an increase of more than 48% in annual terms. Such high inflation has not been observed in Turkey over the past 20 years. The country’s external liquidity is at a low grade. In addition, there is no complete confidence in the policy pursued by its authorities. While many central banks have begun to tighten the monetary policy, the Bank of Turkey continues to reduce the key rate. This is required by the head of the Turkish state, Erdogan. Fitch analysts believe that the soft policy pursued by the Turkish authorities will not allow for a reduction in inflation. Turkey’s financial system may deteriorate. Inflation will remain high.


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Arseny Kudrin

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