Turkey gains investment grading from Moody's

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Turkey gains investment grading from Moody's

Turkey gains investment grading from Moody's
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Turkey’s economy has been given a boost with an upgrade by the Moody’s ratings agency.

Shares rose in Istanbul on Friday and the country’s cost of borrowing fell.

Fitch had lifted Turkey to investment-grade in November, while Standard & Poor’s is expected to follow suit.

Ankara sees this a seal of approval from international markets for a decade of economic reform.

The Economy Minister Zafer Caglayan said they now expect much greater investments from overseas but added the central bank needs to be ready to respond to the rise in the value of the Turkish lira.

He added: “Turkey long deserved this rating, or an even higher one, both economically and politically. I see this as a delayed recognition of what we deserved.”

Deputy Prime Minister Ali Babacan, echoed Caglayan’s criticism of the time it has taken for Turkey to attain its current rating levels.

“This decision is as correct as it is late. Due to the right steps that we have taken on the economy, our country’s indicators in global markets have for a long time been on a similar level as those countries with investment-grade credit ratings,” he said in a statement.

Moody’s said the one-notch upgrade was based on structural improvements in the economy and in public finances that will better insulate Turkey from external shocks.

It expected Turkey’s debt burden to decline in the coming years after falling 10 percentage points to a “manageable” 36 percent of GDP since the beginning of 2009.

The move by Moody’s came just just hours after the central bank cut key interest rates by 0.5 percent.

That was done to stimulate the economy, which has been faltering a bit, and to keep the lira from appreciating due to monetary easing by other central banks.