Moody’s Credit Rating Decision Expected This Week Amid Rising Foreign Interest
The most anticipated event in the markets this week is Moody’s credit rating decision for Turkiye. The credit rating agency is expected to publish its assessment on Friday. With increasing foreign interest, the credit rating decision holds significant importance. There is curiosity whether Moody’s will follow the other major credit rating agencies in upgrading Turkiye’s rating.
Market Speculations on Moody’s Decision
Moody’s will release its evaluation for Turkiye on the night of July 19, Friday. The agency’s potential rating upgrade, following Standard and Poor’s (S&P) and Fitch Ratings, is a hot topic in the markets.
In January, Moody’s published its first report of the year for Turkiye, maintaining the B3 credit rating but upgrading the outlook from stable to positive.
Economists’ Expectations:
- Potential Upgrade: Moody’s upgrade of the outlook in January is seen as a significant step towards a credit rating increase.
- Rating Hike Predictions: While markets expect an upgrade, there are varying opinions on the extent. The majority believe a one-notch upgrade from B3 to B2 is likely, while some anticipate a two-notch increase to B1.
- Outlook: The outlook is expected to remain positive.
Economists note that Moody’s current rating for Turkiye lags behind other rating agencies.
Current Credit Rating Status of Turkiye
According to Moody’s, Turkiye’s credit rating is B3, placing it at the lowest tier of “highly speculative” levels. This is significantly below “investment grade.” Even a two-notch upgrade would not lift Turkiye out of the “highly speculative” category. Moody’s is scheduled to publish its final assessment for Turkiye in 2024. An out-of-schedule rating increase could occur, but following the timetable, it would be impossible to reach “investment grade” before the second half of 2026.
It’s also possible that Moody’s might not issue a report on the scheduled date.
Developments in 2024
- S&P: In May, S&P upgraded Turkiye’s credit rating from B to B+, maintaining a positive outlook.
- Fitch Ratings: In March, Fitch upgraded Turkiye’s credit rating from B to B+, with the outlook changing from stable to positive. Fitch will release another assessment for Turkiye on September 6.
- Moody’s: On January 12, Moody’s revised Turkiye’s outlook from stable to positive.
Source: NTV / Prepared by Irem Yildiz