S&P lowers Turkey’s sovereign rating to B+ from BB-; maintains outlook at stable – Reuters

S&P Global Ratings has recently announced that it lowered Turkey’s sovereign rating to B+ from BB- while maintaining the outlook at stable. Below are key takeaways, via Reuters, from the publication.

• S&P says Turkey long-term foreign currency rating lowered to ‘b+’ on implications of extreme lira volatility; outlook stable.
• S&P says substantial weakening of lira has negative fiscal implications for Turkey,while straining corporate balance sheets,pressuring domestic banks.
• S&P says affirmed Turkey’s short-term foreign and local currency sovereign credit ratings at ‘B’.
• S&P says now project that Turkey’s economy will contract in 2019.
• S&P says stable outlook reflects the balanced risks to its ratings on Turkey over next 12 months.
• S&P says extreme volatility of Turkish lira and resulting projected sharp balance of payments adjustment will undermine Turkey’s economy.
• S&P on Turkey says it forecasts a recession next year.
• S&P says Turkey’s economic risks are, in its view, “Aggravated by an absence of a rapid and effective policy response”.
• S&P says view new economic model recently announced by Turkey’s government as lacking specific policy proposals.
• S&P says policy response from turkey’s monetary & fiscal authorities has so far been limited to risks.
• S&P says “Absent quick and decisive actions,” Turkey’s economic, financial & fiscal costs could escalate.
• S&P says there are also substantial risks stemming from Turkey’s international relations.