First two-notch increase! Moody’s raised Turkey’s credit rating from ”B3” to ”B1”

International credit rating agency Moody’s announced Turkey’s credit rating. Moody’s raised Turkey’s credit rating from “B3” to “B1”, while maintaining the credit rating outlook as “positive”.

CREDIT SCORE INCREASED BY TWO LEVELS AT ONCE

Moody’s announced its assessment of the Turkish economy. The credit rating agency announced that Turkey’s credit rating was raised from “B3” to “B1” and that the credit rating outlook was maintained as “positive”. The agency increased Turkey’s credit rating by two notches for the first time.

The main driver of the upgrade to B1 credit rating was improvements in governance, particularly the resolute and increasingly well-established return to orthodox monetary policy, the statement said.

“IT GIVES CONFIDENCE THAT INFLATIONARY PRESSURES WILL RELIEVE”

The statement noted that this has yielded the first visible results in terms of reducing Turkey’s major macroeconomic imbalances, and that “the fact that inflation and domestic demand have begun to moderate gives us greater confidence that inflationary pressures will ease significantly in the coming months and towards 2025.”

“TURKEY’S HIGH EXTERNAL VULNERABILITY HAS DECREASED SIGNIFICANTLY”

The statement conveyed that the Central Bank of the Republic of Turkey (CBRT) rapidly increased the credibility of its monetary policy, which helped to re-establish confidence in the Turkish Lira. It was also noted in the statement that the tight policy stance significantly reduced Turkey’s high external vulnerability, and that the positive outlook reflected the upward risk balance.