Turkey’s Sovereign Ratings Lowered; Outlook Revised to Stable

Ref: TR20CRA00-01 29 May 20 20

Turkey’s Sovereign Ratings Lowered; Outlook Revised to Stable

Rating Action

Capital Intelligence Ratings (CI Ratings or CI) today announced that it has downgraded Turkey’s Long-Term Foreign Currency Rating (LT FCR) and Long-Term Local Currency Rating (LT LCR) to ‘B+’ from ‘BB-’ . At the same time, CI Ratings has affirmed the s overeign’s Short-Term Foreign Currency Rating (ST FCR) and Short-Term Local Currency Rating (ST LCR) at ‘B’. The Outlook for all ratings has been revised to Stable from Negative.

R ating R ationale

The rating action reflects CI’s view that external vulnerabilities have increased markedly over the past months due to the government’s expansionary policy stance and the noticeably more unfavourable external environment following the global spread of Covid-19 . Both t he current and financial account s have witnessed large net outflows in the first quarter of 2020…