Moody’s says political risk pressures Turkey credit
Ratings agency Moody’s said political risk will continue to put pressure on the outlook for Turkey’s credit markets.
Moody’s highlighted Turkey among the countries where such risks may hold sway. The list also included Italy, Brazil and Argentina, it said, according to Dunya newspaper.
Moody’s cut Turkey’s sovereign debt rating further into junk territory in August, citing a weakening of public institutions and the increasing power of President Recep Tayyip Erdogan over economic decision-making, which makes policy more difficult to predict.
“That weakening is exemplified by heightened concerns over the independence of the central bank, and by the lack of a clear and credible plan to address the underlying causes of the recent financial distress,” the agency had said.
Turkey’s lira hit a record low of 7.22 per dollar in August but has since strengthened after the central bank hiked interest rates and the government took measures to rein in budget spending. The lira traded at 5.46 per dollar on Monday, down about a third this year.