S&P evaluated the Turkish economy “positively”

International credit rating agency Standard & Poor’s (S&P) Country Ratings Director, Frank Gill, stated that Turkiye’s credit rating outlook has been upgraded to “positive” due to the increasing signs that the Turkish economy has been rebalanced recently.

The credit rating agency held a meeting titled “Emerging Markets Outlook: Turkiye 2024 Outlook” online.

At the meeting, Gill evaluated the effects of Turkiye’s recent steps taken to increase economic stability and said, “We raised Turkiye’s credit rating positively while maintaining its B credit rating, reflecting the increasing evidence that the Turkish economy is in fact rebalancing.”

Commenting on Turkiye’s third quarter growth data of this year, Gill said: “Overall, we think that there are signs that the reintroduction of the Orthodox monetary policy in the economy, especially, has started to provide benefits in terms of rebalancing the economy, increasing domestic savings, slowing down consumption and therefore reducing imports.”

Evaluating the general outlook of the Turkish economy, Gill said, “Our basic scenario is that the Turkish economy will benefit from a soft landing.”

Touching on the conditions to be sought in order to increase Turkiye’s credit rating in the future, Gill said, “We can also increase the rating if the balance of payments results improve, domestic savings increase, the Turkish lira increases, and Turkiye’s usable foreign exchange reserves increase.”

Evaluating the outlook of Turkish banks at the meeting, S&P EMEA Financial Institutions Deputy Director Anais Ozyavuz stated that Turkish banks have sufficient capital buffers and said:

“Of course, we expect some capital loss in banks due to further depreciation of the currency. But I think this will be manageable (conditions). It is also a comforting factor that most of the banks have made free provisions for the last two years that they can use if needed.”

Source: Patronlardunyasi / Prepared by Irem Yildiz

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