S&P Global Ratings on Thursday revised Turkey’s sovereign credit outlook to positive from stable on subsiding twin deficits and affirmed its rating at “B,” Reuters reported.
The move comes outside of a strict ratings calendar and S&P said the deviation complies with recent policy adjustments including last week’s 10 percentage point hike in the central bank’s benchmark rate to 40 percent as well as “the monthly current account surplus posted in September, and the recovery in usable reserves during the first 17 days of November.”
A “B” rating is five notches below investment grade. The positive outlook indicates a possibility of an upgrade but is not tied to a timeline.
Emerging markets economist Timothy Ash said there is Finance Minister Mehmet Şimşek and his team behind the S&P’s moving of Turkey’s sovereign credit outlook to positive from stable a rating upgrade is likely following the local elections of March 31.
Turkey – good news with S&P moving their single B rating to positive from stable. Credit her to Simsek and team for moving to orthodox policy. Rating upgrades likely after local elections.
— Timothy Ash (@tashecon) December 1, 2023
The Turkish central bank’s net international reserves rose by near $7 billion to $35.81 billion in the week to Nov. 24, hitting its highest since March 2020, data showed on Thursday.
The next scheduled review for Turkey will take place in 2024, S&P said.
