S&P lowers Turkey's credit rating
In an unexpected move, Standard & Poor's cut its sovereign debt rating on Turkey further into junk territory. Turkey slams the decision accusing the agency of "incorrect timing."
"The rating action also reflects our concerns over Turkey's deteriorating external position and rising distress in the externally leveraged private sector," rating agency S&P says.
Global credit rating agency Standard & Poor's announced on Tuesday that it had lowered Turkey's credit rating.
The agency cut the country’s foreign currency sovereign credit rating to 'BB-/B' from 'BB/B' but with a stable outlook.
"We are downgrading Turkey because of what we view as increasing macroeconomic imbalances," the agency said in a statement.
"In this context, the downgrade reflects our concerns over a deteriorating inflation outlook and the long-term depreciation and volatility of Turkey's exchange rate," it added.
The government's point man on the economy, Deputy Prime Minister Mehmet Simsek, accused the international credit rating agency of intentionally bringing forward the assessment which was initially planned for August.
Simsek on Twitter said "the timing of S&P decision is quite suspect! The International credit rating agency was previously scheduled to review Turkey's credit note in August. Clearly, the decision was pushed forward to an earlier date."
Simsek said that "the analysis of S&P is also insufficient" adding that "the early elections have decreased the political uncertainty and the markets had responded positively to the decision."
Warning over rating
The agency warned that Turkey's rating could be lowered again if external financing conditions and the exchange rate deteriorate further and if vulnerabilities in Turkey's private sector increase.
"In addition, we could lower the ratings if Turkey's fiscal position on a stock and flow basis deteriorates further should the government continue to rely on fiscal stimulus measures to support the economy or should contingent liabilities mount or hit the government's balance sheet," the statement said.
S&P said Turkey's rating could be raised if the central bank brings the inflation level within its five-percent target range and if Turkey's external position improves sustainably.
The agency said the next scheduled publication on Turkey’s sovereign rating will be on August 17, 2018.
Turkey's exports surpass $160 billion
The announcement by S&P comes as Turkey's exports rose to $161.1 billion in the last 12 months with a 10.7 percent increase, according to the Turkish Exporters' Assembly.
The assembly on Tuesday announced Turkey's export figures for April, revealing that the country's exports went up by 15 percent to reach $13.54 billion.
It added the country's exports in the first four months of this year rose by 10.4 percent and became $54.7 billion.
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