Fitch Ratings Downgrades Turkey’s Credit Rating

The high inflation in our country causes the citizens to suffer financial difficulties by increasing the cost of living. The other day, the Central Bank of the Republic of Turkey announced its year-end dollar and inflation forecasts. In these forecasts, it was stated that a decrease in the dollar and an increase in inflation were expected.

International credit rating agency Fitch Ratingsannounced that Turkey’s credit rating was lowered with its new statements and a new report published. The institution, which changed its credit rating outlook from ‘stable’ to ‘negative’ in December, now confirms this decision and that its credit rating is from ‘BB-‘ to ‘negative’.B+announced that it was downloaded to .

High inflation highlighted

In the published report, to high inflation was also emphasized. Underlining the relationship between ‘more frequent and intense policy-oriented’ financial stress periods and high inflation in Turkey according to Bloomberg HT, Fitch stated that the vulnerabilities regarding low foreign liquidity and weak policy credibility have increased.

The current policy to reduce inflation not expected The report noted that Turkey’s expansionary monetary policy, including negative real interest rates, could keep inflation rates at high levels. In addition, it was emphasized by Fitch that this policy could put pressure on the environment of trust and increase the pressures on international reserves again.

Finally, underlining the political developments, the report stated that such situations limit the Central Bank’s ability to raise the policy rate. In addition, Fitch noted that the capacity of the new economic instrument to improve sustainability in a high inflation environment was ‘limited’ and that monetary easing caused a deterioration in domestic confidence, and also made an inflation forecast. In the report, inflation is expected by the end of the year. to 38%average in 2022 to 41% and in 2023 to 28% was predicted to arrive.