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Turkish officials reject Moody's downgrading Turkey's credit rating

Xinhua, September 25, 2016 Adjust font size:

Turkish Deputy Prime Minister Mehmet Simsek said Saturday that Turkey will accelerate structural economic reforms and maintain fiscal discipline, responding to Moody's decision to downgrade Turkey's sovereign credit rating from Baa3 to Ba1.

On Friday, ratings agency Moody's cut Turkey's long-term issuer and senior unsecured bond ratings by one notch to the speculative or "junk" level of Ba1 with a "stable" outlook.

"Expediting economic reforms and protecting fiscal discipline will be our best answer to the credit agencies," Simsek tweeted, adding "we will keep reforms without stopping."

"The fundamentals of Turkey are solid," he noted. " Our economy grew 5.2 percent in the post-global financial crisis era regardless of lots of domestic and international shocks."

Turkish Economy Minister Nihat Zeybekci also reacted to the agency's decision in his twitter and pointed out that the decision doesn't reflect the real Turkish economy.

"Turkey's economy grew 3.9 percent in the first half of the year, although the global economy slowed down." he tweeted.

"At the same time, our current account deficit declined and produced a budget surplus, while many other economies posted deficit," Zeybekci said.

The minister also said that neither in Turkish private sector nor in public sector experienced any deterioration in funding capabilities.

"We will continue to make reforms which will improve business climate by maintaining our political stability and market-friendly approach," he added.

Moody's said in its report that risks related to the country's sizeable external funding requirements increased and Turkish GDP growth and institutional strength slowed down.

According to the report, Turkey's finances have weakened amid increased political turmoil after the July 15 coup attempt.

The agency said it expects that the deterioration in Turkey's credit rating will continue over the next two to three years.

It added that the stable outlook reflected "the government's robust balance sheet, which would allow for the absorption of shocks and flexible responses."

Moody's also said it sees Turkey's real GDP growth averaging 2.7 percent between 2016 and 2019. Endit