Türkiye's 5-year credit default swaps falls below 300 mark

ISTANBUL

Türkiye's five-year credit default swaps (CDS) fell below the 300 mark on Thursday for the first time since March 2021.

Türkiye's CDS – a form of insurance for bondholders – dropped to a two-year low of 299.9 basis points.

Economy management's moves on reducing the uncertainties regarding the Turkish economy increase the interest in Turkish lira assets and find a response in the international arena.

Türkiye's Central Bank has taken various simplification steps besides raising the interest rates gradually to 40% from 8.5%.

Thanks to Turkish policymakers' progress in cooling down the country's "overheated" economy and rebuilding its Central Bank's depleted stock of net foreign currency reserves, S&P Global this month revised its outlook on Türkiye from stable to positive on Thursday, affirming the country rating at "B".

Analysts expect Moody's to upgrade Türkiye's credit rating and outlook due to these developments.

The Turkish Central Bank's official reserve assets hit a new record high of $141.4 billion as of Dec. 8, according to weekly figures released on Thursday.

Total reserves, which have been increasing for the last 11 weeks, now stand above the 2022 year-end level of $128.8 billion.

According to the data released on Thursday by the Central Bank, total net portfolio inflows hit $1.5 billion last week, the strongest portfolio inflow since July 21, 2017.