Ratings agency Fitch revised Turkey’s outlook to “negative” from “stable” on Friday, citing depleting foreign exchange reserves, weak monetary policy credibility and a sizable current account deficit among factors that have exacerbated external financing risks, Reuters reported.
The agency affirmed the country’s sovereign ratings at “BB-.”
“Political pressures, the limited independence of the Central Bank of the Republic of Turkey (CBRT), and a track record of being slow to respond to events, increase the risk that policy is tightened insufficiently,” Fitch said in a statement.
Fitch’s move came after Turkey’s central bank decided to hold its benchmark interest rate steady as expected on Thursday despite the lira hitting record lows this week, paving the way to more back-door measures that have tightened credit and slowed the currency’s decline.