Turkiye – Ratings Lowered; Outlook Revised to Stable Rating Action

Ref: TR23 CRA00-0 1 2 June 2023

Turkiye – Ratings Lowered; Outlook Revised to Stable Rating Action

Capital Intelligence Ratings (CI Ratings or CI) today announced that it has lowered Turk iye ’ s Long-Term Foreign Currency Rating (LT FCR) and Long-Term Local Currency Rating (LT LCR) to ‘ B ’ , from ‘ B+ ’ , and revised the Outlook to Stable from Negative. At the same time, t he sovereign ’ s Short-Term Foreign Currency Rating (ST FCR) and Short-Term Local Currency Rating (ST LCR) have been affirmed at ‘ B ’ .

Rating Drivers

The ratings downgrade reflects the country’s reduced capacity to a bsorb external shocks owing to large external financing needs and inadequate foreign reserve buffers, as well as elevated external liquidity pressures. The rating action also takes into account ongoing risks to macroeconomic stability stemming from very high inflation and rapid credit growth, as well as the adverse impact of…