"Moody’s" Turkey downgrades Turkey’s credit rating to the lowest level in its history

The international rating agency Moody’s for the first time in history downgraded Turkey’s rating from B2 to B3.

Moody’s changed the rating outlook based on the current situation with the balance of payments and foreign exchange reserves.

The agency explained that increased pressure on the balance of payments and the risk of a further decline in foreign exchange reserves lag behind the rating.

It also confirmed that Turkey’s current account deficit could significantly exceed previous expectations.

Accordingly, Turkey’s current account deficit is expected to approach 6 percent of GDP this year and triple its pre-Ukraine crisis forecast.

Moody’s noted that “very loose” monetary policy and the high cost of food and energy have led to higher inflation in Turkey and a sharp weakening of the national currency, as it has fallen by about 25 percent this year after falling by 44% last year. percent after cutting the interest rate by 5 percent from 19 percent to 14 percent, which are among the worst currencies in emerging markets.

The lira is currently trading at 17.96 pounds per dollar, close to its all-time low on December 20, 2021, when it fell to 18.4 percent.

Source: Zaman Turkish

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