S&P ups Turkey’s credit rating to ‘investment grade’

Today’s Zaman - International credit rating agency Standard & Poor's raised Turkey's local-currency sovereign credit rating by two notches to BBB- on Tuesday, meaning that the country's credit rating rose to investment-grade for the first time in its history.

“The local-currency upgrade reflects our view of continuing improvements in Turkey's financial sector and the deepening of local markets,” S&P said in its statement, and affirmed the foreign-currency sovereign rating on Turkey at BB, two levels below investment-grade, with a positive outlook.

“The outlook on the ratings is positive. We could raise the ratings on Turkey if, once the economy cools as we expect, it can reduce its current account deficits and slow its domestic credit growth without too badly affecting its fiscal accounts or financial-sector stability. We could also raise the ratings if deeper reforms to social security resulted in a stronger fiscal performance that started to substantially reduce the government’s debt,” S&P said, signaling further rating increases.
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