Moody鈥檚 has raised Turkey鈥檚 long-term debt rating one notch, from B1 to Ba3, with a stable outlook, though it remains in speculative territory, the rating agency said.
Moody鈥檚 justified its decision Friday by citing effective economic policies that have helped restore investor confidence in the Turkish lira.
It also highlighted the central bank鈥檚 commitment to tight monetary policy that 鈥榙urably eases inflationary pressures鈥� and 鈥榬educes economic imbalances.鈥�
Inflation continued to slow slightly last month in Turkey, reaching 35 percent year-on-year, according to official figures released in early July.
It had exceeded 75 per cent in May 2024 year-on-year, before slowing month after month.
Moody鈥檚 said the government鈥檚 structural reforms鈥攁imed at reducing energy dependence and boosting export competitiveness鈥攃ould make the economy more resilient to external shocks.
But the agency warned that limited foreign exchange reserves still leave Turkey vulnerable to balance of payments shocks.
The Turkish central bank cut its key interest rate from 46 percent to 43 percent on Thursday, a slightly larger-than-expected reduction.
The institution began a series of rate cuts in December as inflation slowed, but on Thursday it predicted a temporary rebound in monthly inflation in July.
In the longer term, it expects inflation to ease to 24 percent by the end of this year and 12 percent by the end of 2026.
