- Fitch Ratings raised Turkey’s long-term foreign currency debt rating to BB- from B+, with a stable outlook.
- The upgrade reflects improvements in fiscal policy and foreign reserves.
- Inflation has eased from 75% in May to 51.97% in August, thanks to stricter fiscal measures and lower food prices.
Ankara, 9 September (FinanceFlashNews) – Fitch Ratings upgraded Turkey’s long-term foreign currency debt rating to BB- from B+, marking the second upgrade this year. The agency also revised Turkey’s outlook to stable from positive, citing improved fiscal policy and healthier foreign currency reserves. The move was reported by businesstimes.
Fitch noted that Turkey’s commitment to tight monetary and fiscal policies in the fight against inflation—which peaked at 75% in May but eased to 51.97% in August—has contributed to the country’s economic stabilization. Lower food prices have played a significant role in bringing inflation down.
The agency highlighted that the combination of tighter monetary policy, planned budget cuts, and wage adjustments should reduce inflation and the current account deficit, helping to maintain foreign reserves.
However, Fitch also warned that there is still a risk of Turkey reversing its monetary policies, given the country’s political preference for low interest rates. This could leave Turkey vulnerable to default risk, especially if adverse economic conditions arise.
Other major rating agencies have similarly upgraded Turkey’s outlook. In July, Moody’s raised Turkey’s rating to B1 from B3, citing better fiscal management and stricter monetary policy. In May, S&P upgraded Turkey to B+ from B, pointing to improved coordination between monetary, fiscal, and income policies.
Keywords: Fitch Ratings, Turkey credit rating, inflation, foreign reserves, monetary policy
