Moody’s cut Turkey’s sovereign rating deeper into junk territory

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The sovereign rating of Turkey from the international agency Moody’s Investors Service has been lowered from “Baa3” to “junk” “B1” level. The rating outlook remained “negative”. The change to the bad side is explained by the continuing and even increasing risks of the balance of payments crisis in Turkey. According to analysts at Moody’s, the risk of a default on government bonds has increased. It is expected that a period of sharp volatility in the economy and financial sphere may be delayed, given the fact that the country has an insufficient amount of foreign exchange reserves. This year, the Turkish economy has faced the first recession in the last decade. The Turkish authorities have negatively perceived information about the downgrade. The Ministry of Finance stated that the agency had ignored the positive changes observed in the Turkish economy, indicating its recovery.

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