Moody's move will not harm Turkish economy: Deputy PM

ANKARA

Indicators have shown Moody's rating cut has had no effect on the Turkish economy, Deputy Prime Minister Nurettin Canikli said on Tuesday.

In an interview with a private channel, Canikli said neither macroeconomic figures nor short-term market moves indicated the credit rating agency's decision had been disruptive for markets.

Canikli stressed no special measures would be put in place to counter potential negative effects of Moody’s credit rating downgrade.

"There is no specifically designed move planned to offset the decision. Actually Moody's in its report clearly explains the strong economic structure and sound fiscal discipline of Turkey. It is quite incomprehensible that the rating was cut after that," Canikli said.

"There were comments saying Turkey may find itself face-to-face with a troublesome period after a rating cut. We said it would not happen. Our assessments are completely economic, absolutely not politically motivated,” he added.

“Turkey's most important attribute is retaining its growth momentum and strong economic structure in the most challenging environments," Canikli said.

He added that the Turkish economy had known worse.

"The potential harmful impact of the July 15 coup attempt was much more important than the difficulties that might arise from a Moody's rating cut. We have an economy that has lived through even that event without suffering permanent harm," he said.

Canikli considered a capital outflow from Turkish markets unlikely.

Canikli said there had been $900 million of net capital inflow in August and around $250-300 million in September.

"If net inflows go on even after an incredible shock such as the July 15 coup attempt, we should accept it is highly unlikely that it would be affected by a Moody's rating cut" he said.

Credit ratings agency Moody's recent decision saw Turkey's rating downgraded to non-investment grade.