Turkey’s 5-year Credit Default Swap (CDS) fell to 276 basis points, reaching its lowest level since February 2020. The five-year Credit Default Swap (CDS), which indicates Turkey’s ability to repay debt and is referred to as the risk premium, fell to 276 basis points in today’s transactions, marking the lowest level since February 2020. Turkey’s 5-year CDS premium started the day at 285 basis points.
Analysts emphasized that the ongoing decline in Turkey’s CDS was accompanied by positive changes in international credit rating agencies’ assessments of Turkey’s credit rating and outlook, indicating increasing investor confidence in the Turkish economy.
Karahan: Current policy mix has reduced the risk premium
Fatih Karahan, Governor of the Central Bank of the Republic of Turkey (CBRT), stated the following regarding Turkey’s credit risk premium during his presentation of the ‘Inflation Report 2024-II’ today:
“The current policy mix has improved the perception of risk towards Turkey and reduced the risk premium.The improvement in Turkey’s risk premium has slowed since the beginning of the year. Increased exchange rate volatility and deterioration in reserve outlook weakened the risk perception in March. Decisions taken in March reinforced our tight monetary policy stance, increased confidence in our policies, and improved the reserve outlook. With these developments, the risk premium has once again fallen below the 300 basis points level.”
