Fitch upgrades Turkey’s rating one notch
Rating agency Fitch on Friday upgraded Turkey’s rating to “B+” from “B”, citing tighter approaches to its monetary policy helping reduce macroeconomic issues.
Fitch also revised Turkey’s outlook to positive from stable.
The rating change comes after the country’s central bank left its key interest rate steady in February.
“Upgrade reflects increased confidence in the durability and effectiveness of policies implemented since the pivot in June 2023,” said Fitch.
After President Tayyip Erdogan’s re-election in May, Turkey abandoned its unorthodox low interest rate policy in favor of tightening, raising its key rate to 45% from 8.5% last June.
Inflation subsequently rose to an annual 67.07% in February, exceeding expectations and keeping up the pressure for tight monetary policy.
Turkey is expected to take more policy steps to cool inflation after local elections on March 31, setting the stage for more pain for Turks already struggling after years of soaring prices, according to data and some economists.
[Reuters]
