Positive Developments in Turkey's Credit Outlook

Positive Signals from Moody’s and Fitch

Although Moody’s has not updated Turkey’s credit rating, it reported that there is potential for an upgrade if the implemented policies are sustainable. On the other hand, Fitch Ratings drew attention by changing Turkey’s credit rating outlook from stable to positive. Minister of Treasury and Finance Mehmet Şimşek evaluated Fitch's move as a development that lays the groundwork for a rating upgrade.

The Role of Policies and Economic Stability

In its statement, Moody’s emphasized that Turkey’s credit rating is strongly supported by a large and diversified economy and low public debt levels. However, it mentioned that the credit rating could be upgraded if macroeconomic stability is restored and external vulnerability risks are significantly reduced. Fitch's assessments also highlighted the importance of a policy framework that supports a sustainable decline in inflation.

Fitch's Rating Outlook and Expectations

Fitch Ratings confirmed Turkey’s credit rating at BB- and changed the credit rating outlook to positive. This situation increased hopes for a rating upgrade by September 2024. The reduction of political risks and the implementation of governance strengthening measures were listed as significant factors that could help improve Turkey’s credit rating.

Minister Şimşek’s Asia-Pacific Engagements

Minister Şimşek will meet with investors at the Asia Financial Forum held in Hong Kong. In a message shared on his social media accounts, Şimşek stated that efforts to reduce Turkey’s economic vulnerabilities and strengthen macro financial stability continue.

Expiration of Currency-Protected Deposits

The Central Bank of the Republic of Turkey (CBRT) has made regulations regarding the expiring Currency-Protected Deposit (KKM) accounts. The Central Bank announced that KKM account opening and renewal processes will end as of August 23, 2025. Recently, a significant decrease in KKM accounts has been observed.

Increase in CBRT's Reserve Requirement Ratios

The Central Bank also decided to increase the reserve requirement ratios applied to Turkish lira debts with maturities of up to one year. For funds obtained from foreign repo transactions, these ratios were increased by 2 percentage points to 20%.