Sunday, 4 June 2023

Standard & Poor’s revised its outlook for Turkey to “negative”‎

Standard & Poor’s Global Credit Ratings revised its outlook for Turkey to “negative” from “stable” on Friday, attributing this to risks arising from low interest rates, targeted lending and regulators’ oversight of foreign exchange positions and interest rates.

Turkey suffers from high prices of goods and services. It is expected that the devastating earthquake that struck the country last month will lead to a continued rise in inflation in the period leading up to the presidential and parliamentary elections on May 14th.

On February 23, the Turkish Central Bank cut the main interest rate to 8.5% to mitigate the impact of the earthquake on the country’s economic situation.

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“Given Turkey’s high current account deficit, limited usable reserves, high inflation and reliance on intermittent capital inflows, the outlook for the exchange rate remains, at best, misty,” the agency said in a statement.

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