Türkiye's CDS Drops to Lowest Point in 5 Years

2025-09-17 08:42:04

(MENAFN) Türkiye's five-year credit default swap (CDS), a key measure of credit risk, dropped to 240 basis points on Wednesday, marking the lowest point since February 2020.

The CDS, which functions as insurance for bondholders, has fluctuated between 242 and 370 basis points over the past year. In contrast, it peaked at 840 points in 2022.

Türkiye’s economy has seen continuous growth for 20 consecutive quarters, alongside a noticeable decrease in inflation. As a result, investor confidence in Turkish lira assets remains strong, bolstered by the nation’s ongoing disinflationary trends.

The Turkish Central Bank's (CBRT) recent interest rate cuts have further fueled a growing appetite for domestic investments, as part of a broader strategy to combat inflation.

CBRT reserves reached an all-time high of $180 billion last week, a major milestone that signals further economic stability.

These factors are collectively driving heightened foreign interest in Turkish lira assets and contributing to a reduction in Türkiye's borrowing costs.

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