Supporters of Muharrem Ince, presidential candidate of Turkey's main opposition Republican People's Party (CHP), attend an election rally in Istanbul, Turkey June 23, 2018. REUTERS/Osman Orsal
WASHINGTON, Aug 22 (MENA) - Fitch Ratings has revised the Outlook on Turkey's Long-Term Issuer Default Ratings (IDRs) to Negative from Stable and affirmed the IDRs at 'BB-', according to a report published by the website of Fitch Ratings.
A depletion of foreign exchange reserves, weak monetary policy credibility, negative real interest rates, and a sizable current account deficit, have exacerbated external financing risks.
Political pressures, the limited independence of the Central Bank of the Republic of Turkey, and a track record of being slow to respond to events, increase the risk that policy is tightened insufficiently, contributing to further external imbalances, market instability, and a more disorderly adjustment.
The $750 billion economy is expected to shrink 4% this year, according to a survey of 23 economists by Bloomberg published last month.
A lockdown to curb the spread of Covid-19 shuttered businesses across Turkey, while the pandemic has also disrupted global supply lines.
Foreign-currency reserves dropped to $45.4 billion as of Aug. 14 from $81.2 billion at the end of last year.