International credit rating agency Fitch affirmed Turkey's long-term foreign and local currency Issuer Default Ratings at BBB- and BBB respectively on late Friday, leaving the outlook stable.
"The issue ratings on Turkey's senior unsecured foreign and local currency bonds have also been affirmed at 'BBB-' and 'BBB', respectively. The country ceiling has been affirmed at 'BBB' and the short-term foreign currency IDR at 'F3'," the agency said in a press release.
Declines in oil prices were credit positive for the country’s economy as it supports the Central Bank of Turkey’s efforts to rein in high inflation and lower the current account deficit, according to the statement.
The agency pointed out that Turkey achieved this feat despite the serious negative effects of declining exports to nearby regions such as Russia, Ukraine and the Middle East due to geopolitical and terror crises.
Last year was a challenging one for Turkish exporters as the growth of European economy, Turkey’s largest export market, hovers near 0 percent and the second largest export market, Iraq, was hit by terror caused by Daesh.
Fitch also stressed that so far there are no signs of populist economic policies implemented to boost the voter base of the ruling AK Party ahead of the June parliament elections.
Regarding possible worries over the banking system, Fitch said that “the banking system remains in good shape for the most part, unaffected by developments at Bank Asya.”
On Feb. 4, the Savings Deposit Insurance Fund, the agency responsible for resolving failed banks, took over the management of the Bank Asya based on breach of transparency requirements in the partnership structure of the bank.
