Moody’s Investors Service raised Turkey’s credit rating by two notches from B3 to B1 on Friday evening, and maintained its outlook at “positive.” This is Turkey’s first rating upgrade in more than a decade.
The agency said in a statement that the main motivation for raising Turkey’s credit rating was developments in economic management, especially the increasingly firm and steadfast return to conventional monetary policy.
The statement indicated that this yielded the first clear results in terms of reducing the main imbalances in the Turkish macroeconomy.
“The decline in inflation and domestic demand gives us more confidence that inflationary pressures will decline significantly in the coming months until 2025,” the statement said.
The agency stressed that the Turkish Central Bank has rapidly increased the credibility of its monetary policy, which has helped restore confidence in the Turkish lira.
She stressed that the tough political stance has greatly reduced Turkey’s high external fragility, and that the positive expectations reflect the upward balance of risks.
Moody’s credit upgrade follows a rating update in March by Standard & Poor’s and Fitch, which raised Turkey’s rating fromwith me” (B) to “B+”.
Türkiye’s return to conventional policies has led to a turnaround in inflation and a rapid increase in the central bank’s foreign exchange reserves.
