Bad news from Moody’s: Turkey’s credit rating downgraded from from Baa3 to Ba1

Turkish administration was certainly not happy when international ratings company Moody’s cut Turkey’s long-term issuer and senior unsecured bond ratings by one notch from Baa3 to Ba1 with a “stable” outlook late on Friday, placing the country’s credit rating under “investment” grade.

Turkey has recently experienced difficult times both in terms of domestic politics and economy due to several factors such as conflict with Russia and Germany as well as the coup attempt pushed back by the government. However the administration has managed to overcome the shock incurred and Turkey as maintained by the officials is supposed to be back on the right track again, in terms of economy in specific.

Moody’s, which had previously delayed its decision, cited two key reasons for the downgrade: “The increase in the risks related to the country’s sizeable external funding requirements and the weakening in previously supportive credit fundamentals, particularly growth and institutional strength.”

The Turkish Administration however was taken aback by the negative evalutaion from the international rating company when the news was circulated that Moody’s downgraded Turkey’s credit note.

The agency said it expects that the deterioration in Turkey’s credit rating will continue over the next two to three years. It added that the stable outlook reflected “the government’s robust balance sheet, which would allow for the absorption of shocks and flexible responses”.

SOURCE: MEDIA