The rating agency has cut Ankara’s credit rating deeper into junk territory
International rating agency Fitch has slashed Turkey’s debt rating to B from B+, citing government policies that have reportedly contributed to “spiraling inflation” and discouraging capital inflows.
The agency also forecast annual inflation to average 71.4% in 2022, the highest of any country rated by Fitch, adding that its trajectory remains highly uncertain.
The agency expects average inflation to slow to 57% in 2023 amid overly accommodative policies until parliamentary and presidential elections that are scheduled for June 2023.
“Guided by political considerations, the central bank has maintained its policy rate at 14% since December 2021, despite rapidly rising inflation, the impact of the war in Ukraine on commodity markets and tightening monetary policy in most advanced economies,” Fitch said on Friday.
READ MORE: Turkey hopes to rein in runaway inflation
The Central Bank of Turkey has kept its policy rate unchanged this year even as annual inflation surged to 78.6% in June. As a consequence, the country has the lowest real yield in the world at minus 64.6%.
Turkey’s national currency, the lira, lost 44% of its value against the US dollar in 2022, mostly due to a series of rate cuts from the regulator. It is down a further 23% so far this year.
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https://ift.tt/bOnTSqV 09, 2022 at 08:56PM
from RT – Daily news