Moody's: Positive Momentum in Turkey's Credit Rating is Limited

Important Assessments on Moody's Credit Rating

Moody’s Country Risk Group Senior Credit Officer Alexander Perjessy emphasized that the Central Bank of the Republic of Turkey (CBRT) continues to fulfill its functions, but the level of the institution's independence has not increased sufficiently.

No Change in CBRT Law

Speaking at an event held in Istanbul, Perjessy pointed out that the CBRT law has still not changed, highlighting the implications of this situation on the credit rating.

Positive Momentum and Risks in Credit Rating

Perjessy stated that the positive momentum in Turkey's credit rating has currently reached a plateau. However, he noted that the disinflation process has significantly slowed. He warned that political tensions could lead to a reversal of some gains in macroeconomic stability.

Political Tensions and Investor Confidence

Perjessy expressed that "political tensions have a history of undermining investor confidence in Turkey. Political developments can complicate the implementation of monetary policy. Institutions in Turkey are weaker and more vulnerable to political interventions compared to similar countries."

Foreign Exchange Reserves and Economic Challenges

Perjessy also noted that foreign exchange reserves still remain relatively weak. He emphasized that breaking the momentum of inflation may require more economic difficulties and slowdowns.