JCR upgrades Turkey’s ratings by two notches
ISTANBULJapan Credit Rating Agency (JCR) today upgraded its ratings on Turkey by two notches from BB to BBB, saying the outlook of the rating was stable.
JCR’s upgrading of Turkey to investment grade comes shortly after Moody’s Investor Services upgraded Turkey’s government bond ratings by one notch to Baa3 from Ba1, and also assigned a stable outlook to Turkey on May 16.
The JCR and Moody’s decisions are in line with Fitch Ratings, which put Turkey at investment grade BBB-minus with a stable outlook in November. Standard & Poor’s rates Turkey one notch below investment grade at BB-plus, with a stable outlook.
JCR mentioned Turkey’s economic success in the face of the adverse international economic environment coming from the Lehman collapse and the European sovereign debt crisis.
“The improvement on macroeconomic issues has been significant in recent years thanks to the innovative policy measures taken. So are some of the concrete steps for the structural issues, albeit small. The country’s foreign exchange liquidity risk itself is decreasing as the European debt crisis finds its way out. Hence, JCR has upgraded Turkey’s long-term issuer ratings to BBB-. The outlook of the rating is stable,” the JCR press statement stated today.
According to the statement, there is no notable vulnerability in Turkey’s financial system. In addition, it noted that Turkey’s exports to Middle Eastern and African countries were steadily increasing, the first nuclear power plant construction had been commissioned, and laws for the promotion of private pension schemes had been enacted.
The main problems of the Turkish economy are stated as the abatement of the current account deficit, which has tended to worsen with economic growth; control of the growth of domestic credit and foreign exchange fluctuations against speculative international capital flows; and disinflation against years of inflationary pressure.