Both Moody's and S&P downgraded Turkey, highlighting a weakening lira and high debt levels.
Global ratings agency S&P on Friday cut Turkey's debt grade for the second time in four months.
The agency downgraded the rating a notch to 'B+' and pointed to the weakening of the Turkish lira in the past two weeks, amid an overheating economy and high debt levels.
Moody's likewise cited the weakening lira and downgraded Turkey's debt to Ba3 from Ba2, also citing the declining lira, "heightened concerns" for the central bank's independence and "the lack of a clear and credible plan" to address the causes of recent financial troubles.
The currency has come under increased pressure amid the worsening dispute with the United States, including President Donald Trump's decision to double tariffs on steel and aluminum imports from the country.
TRT World's Ediz Tiyansan reports from Washington.
"The downgrade reflects our expectation that the extreme volatility of the Turkish lira and the resulting projected sharp balance of payments adjustment will undermine Turkey's economy," S&P said in a statement.
"We forecast a recession next year. Inflation will peak at 22 percent over the next four months, before subsiding to below 20% by mid-2019."
The declining currency is increasing pressure on indebted local companies, which also could harm the balance sheets of domestic banks, the statement said.
"Despite heightened economic risks, we believe the policy response from Turkey's monetary and fiscal authorities has so far been limited."
Turkey has yet to respond to the announcement of the downgrades.
Turkey and the US are currently experiencing rocky relations after Washington imposed sanctions on two Turkish Cabinet ministers for not releasing US pastor Andrew Brunson, who was arrested and charged with espionage and terrorism in Turkey.
Brunson is charged with spying for the PKK — a designated terrorist group in the US and Turkey — and the Fetullah Terrorist Organization (FETO), the group behind the defeated July 2016 coup attempt in Turkey during which 251 people died and thousands were injured.
President Donald Trump last week ramped up his attack on Turkey by doubling US tariffs on Turkish aluminum and steel imports.
On Wednesday, in retaliation, Turkey increased tariffs on several US-origin products, including alcohol, tobacco products and cars.
On Friday a Turkish court rejected Brunson's appeal to be released.