S&P Global Downgraded Turkey's Sovereign Rating to BB-

Forex News

S&P Global (the rating agency) rates Turkey at BB-, lower than rivals Moody's and Fitch following a downgrade in May, noting that the country's political changes were keeping in focus. Earlier, Fitch has evaluated rating of BB+ on Turkey’s foreign currency debt, but an investment grade of BBB- on domestic bonds, which is two notches higher than both S&P Global and Moody’s.

S&P has a stable outlook on its local and foreign-currency Turkey ratings and has warned its fiscal metrics could sour quickly if the current pressure on its financial markets continues. That is likely to depend on what President and the government do next.

Meanwhile, the S&P Global is watching Turkey closely and it warned that President Tayyip Erdogan's move to install his son-in-law as finance minister showed power in the country was now increasingly centralized.

The S&P Global also forecasts, that the government additional stimulus into the economy to combat the expected hit to growth from recent interest rate hikes could drive up the government's debt levels.