The rating agency has cut Ankara’s credit rating deeper into junk territory
International rating agency Fitch has slashed Turkey’s debt rating to B from B+, citing government policies that have reportedly contributed to “spiraling inflation” and discouraging capital inflows.
The agency also forecast annual inflation to average 71.4% in 2022, the highest of any country rated by Fitch, adding that its trajectory remains highly uncertain.
The agency expects average inflation to slow to 57% in 2023 amid overly accommodative policies until parliamentary and presidential elections that are scheduled for June 2023.
“Guided by political considerations, the central bank has maintained its policy rate at 14% since December 2021, despite rapidly rising inflation, the impact of the war in Ukraine on commodity markets and tightening monetary policy in most advanced economies,” Fitch said on Friday.