Source:
Reuters; Fitch Revises Türkiye's
Outlook to Stable on Political Risks; May 10th, 2007
Credit rating agency Fitch
downgraded the outlook for Turkish debt instruments on Thursday due to
"heightened political risks."
Fitch marked down the
outlook for Türkiye's foreign and local currency debt to "stable"
from "positive." The ratings were affirmed at 'BB-', three
notches below investment grade and comparable to the 'BB-' rating of
Standard& Poor's and 'Ba3' rating of Moody's Investors Service,
reported Reuters.
However, the agency held
the so-called issuer default ratings for these instruments at BB-, held the
short-term currency rating at "B" and the country ceiling at
"BB", said Agence France- Presse.
Türkiye has been the scene
in recent days of massive street demonstrations to defend the secular
nature of Turkish government. The presidential elections had "sparked
an escalation of political risk," said Edward Parker, the head of
emerging markets in Europe for Fitch in its view, adding, "the
military's threat to intervene" and a subsequent constitutional court
judgment had prevented Foreign Minister Abdullah Gül of the ruling Justice
and Development Party, which has Islamist roots, from being elected
president by parliament.
Two other agencies,
Moody's and Standard and Poor's, said recent political turbulence in
Türkiye was unlikely to alter their credit ratings for the country.
Credit ratings are important
because they can affect the price governments must pay for borrowing money
on world markets, and more generally they are seen as indicators of
confidence in the economic outlook.
