Moody’s downgrades Turkey’s credit rating

International credit rating agency Moody’s announced that it had downgraded Turkey’s credit rating from ‘B2‘ to ‘B3‘ and changed the rating outlook from ‘negative’ to ‘stable’.

According to Bloomberg, Moody’s downgraded its credit rating, citing increasing pressures on Turkey’s balance of payments and the risk of a further decline in foreign exchange reserves. The organization also noted that Turkey’s current account deficit could probably exceed previous expectations by a large margin.

Moody’s estimates that the country’s current account deficit will be close to 6 percent of gross domestic product this year, three times more than expected before Russia’s invasion of Ukraine.

‘The authorities have been forced to resort to increasingly unorthodox measures to stabilize the currency and replenish currency buffers,’ analysts said in a statement.

“Increasingly complex regulatory, fiscal and macro cautionary measures are unlikely to be effective in restoring macroeconomic stability,” the analysts said.