Financial markets are pricing in the possibility of Turkey’s credit grade two levels drop Author Reuters



Marc Jones

LONDON, March 24 (Reuters) – Financial markets on the weekend, President Tayyip Erdogan’s Central Bank (CB) followed by the rise in the exchange rate started with the impeachment of the president, two stages of Turkey’s credit rating now pricing to be reduced.

bankruptcy loans they use to protect themselves from the risk of investors swap () showed that premiums are calculated on the basis the S & P Global Capital IQ Market Derived Signal points having a B + credit rating by registering a sharp change Turkey’s B- credit pricing as it were a country that has a note.

The data show that over the past 10 years, MDSS moves preceded downward and upward credit rating changes, but often reacted too harshly.

S & P analysts rigid interest rate increases by double-digit inflation and a struggling employee Chairman of the Central Bank of Turkey Naci the dismissal Ağbal the weekend, he drew attention to the unpredictability of economic policy in Turkey had stated on Monday.

Analysts added that while S&P is not the baseline scenario, the risk of the government introducing capital controls is now “increased”.

A country’s credit rating plays one of the determining roles in the cost of borrowing from international capital markets.

Turkey and BB- by S & P, Fitch rate with higher grades, “the new president of the Central Bank during the state’s external position and direction of monetary policy” will treat announced yesterday.

Fitch stated that the reasons for a possible downgrade in the credit rating would be “the continuous decrease in international reserves or the excessive stress / pressure in the corporate or banking sectors, the decrease in investor confidence as a result of the early relaxation of monetary policy”.

£ Since the dismissal of Ağbal lost about 9% value and some analysts, taking into account currency swaps used by the Central Bank of Turkey’s foreign exchange reserves minus They stated that the 40 billion to 60 billion dollars.

Translated by: Canan Sevgili
Editorial: Can Sezer

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