S&P Global Ratings moved Turkey’s long-term sovereign rating one notch higher to B+ from B, with a positive outlook, Bloomberg reported, citing a statement late Friday.
“Following local elections in Turkiye, we believe the coordination between monetary, fiscal, and incomes policy is set to improve, amid external rebalancing,” S&P Global said.
“Policymakers are set to persevere with efforts to reduce elevated inflation through a combination of monetary and credit tightening, less generous wage settlements, and gradual fiscal consolidation,” the ratings agency added.
S&P Global Ratings raised the country’s rating outlook to positive in November in a move to recognize Turkey’s shift to more orthodox economic policies and the central bank’s steep rate hikes, made to rein in inflation.
Since the revision in the outlook, Turkey’s central bank has raised its policy rate by a further 1,000 basis points to 50 percent from 40 percent and has promised to do “whatever it takes” to curb inflation, which climbed to 69.8 percent year-on-year in April.
Fitch Ratings upgraded Turkey’s credit rating earlier this year to B+ while Moody’s raised its outlook to positive at the same time as affirming its B3 ranking. Although the assessments are positive, the country’s rating still remains several notches below investment grade.
Mehmet Şimşek, Turkey’s treasury and finance minister, earlier cited his expectations for credit upgrades to continue in March following Fitch’s move.
“The positive results of our program are reflected in the decisions of credit rating agencies,” Simsek said Saturday in a post on X, formerly Twitter. “The positive outlooks of S&P, Fitch and Moody’s foreshadow further rating increases,” he added.
“We are determined to carry the confidence in our country to the highest level with our strengthened program.”