International credit rating agency Fitch Ratings reported that Gulf Cooperation Council (GCC) banks with subsidiaries in Turkey will benefit from Turkey’s macroeconomic adjustment and transition to more traditional economic policies.
In the statement made by the credit rating agency, it was conveyed that Gulf Cooperation Council banks with Turkish subsidiaries will benefit from macro policy changes in Turkey.
The statement noted, “GCC banks with Turkish subsidiaries will benefit from Turkey’s macroeconomic adjustment and transition to more traditional and consistent economic policies. Decreasing inflation will reduce subsidiaries’ net monetary losses and the slower depreciation of the Turkish lira will reduce the negative capital impact caused by foreign exchange conversion.”
The statement reminded that following Fitch’s upgrade of Turkey’s credit rating in March, it also upgraded the ratings of 18 Turkish banks, including some subsidiaries belonging to the Gulf Cooperation Council, reflecting increased confidence in the resilience and effectiveness of policies implemented since June 2023.
The statement indicated that the positive outlook also reflects the expectation that Turkey’s overall macroeconomic policy stance will remain consistent with significant declines in inflation, as well as continued reduction in external vulnerabilities.
In the statement, it was mentioned that the net monetary loss of Turkish subsidiaries of Gulf Cooperation Council banks was $2.6 billion last year, and it was expressed that if inflation in Turkey realizes in line with expectations, the expected loss is projected to increase to $2.8 billion in 2024 and then decrease to approximately $1.4 billion in 2025.
source: aa.com.tr/ prepared by Melisa Beğiç