S&P upgrades Türkiye's rating from B+ to BB- maintaining stable outlook

(MENAFN) Standard & Poor's (S&P) announced on Friday that it has upgraded Türkiye's long-term sovereign credit rating from B+ to BB-, accompanied by a stable outlook. This upgrade is attributed to the Central Bank of the Republic of Türkiye's (CBRT) stringent monetary policy, which has successfully stabilized the lira, reduced inflation, rebuilt reserves, and promoted the de-dollarization of the financial system.

The agency noted that Türkiye's savings gap with the global economy has decreased, evidenced by a roughly 4 percentage point decline in the current account deficit as a percentage of GDP since 2022. This improvement is seen as a positive indicator of the country's financial health.

S&P's stable outlook reflects a balanced assessment of risks over the coming year related to the government's efforts to further reduce inflation, manage wage expectations, and achieve a more balanced economic structure. The agency expressed confidence that the current economic team would continue to implement tight monetary policies despite potential challenges in executing the government's medium-term economic program.

However, S&P cautioned that it could downgrade Türkiye's rating if pressures on the country's financial stability or public finances were to escalate. Conversely, the agency indicated that it might consider raising the rating if Türkiye makes further strides toward reducing inflation to single-digit levels and restoring long-term confidence in both the Turkish lira and domestic capital markets.

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