Moody’s: Fed tapering likely to have limited effect on Turkish economy

Credit Rating Agency Moody’s is reported to have stated that the US Federal Reserve’s tapering is likely to have a limited impact on Turkey’s economy because this country has sufficient buffers to withstand medium-term challenges

Turkish officials were pleased to hear statement by Moody’s Investors Service saying a potential tapering of the U.S. government’s quantitative easing (QE) program is likely to result in higher funding costs, greater funding outflows and a reduced availability of credit across global financial markets but the impact on various sectors of Turkey’s economy will likely be limited and short-lived,

“If and when the U.S. Federal Reserve begins QE tapering, Moody’s would expect Turkey to face medium-term challenges in meeting its current account financing needs. However, the sovereign’s balance sheet and its economy possess sufficient buffers to withstand likely medium-term challenges linked to meeting its own financing needs in a QE tapering scenario,” it said on Dec. 2.

The rating agency added that a range of tools introduced since the 2009 recession have strengthened Turkey’s ability to withstand volatility in capital flows.

03.12.2013
SOURCE: MEDIA