S&P, Moody’s lower Turkey’s ratings

By Ovunc Kutlu

NEW YORK

Two major global ratings agencies lowered Turkey’s ratings Friday, saying they could be upgraded with certain economic improvements.

Standard & Poor's said it lowered the country’s long-term foreign currency sovereign credit rating to 'B+' from 'BB-' while maintaining the outlook at stable.

The agency also said it affirmed the short-term foreign and local currency sovereign credit ratings on Turkey at 'B'.

"We could consider an upgrade if the government successfully devises and implements a credible economic adjustment program that bolsters confidence, stabilizes balance-of-payments flows and brings inflation under control," the agency said in a statement.

Moody's meanwhile downgraded Turkey's long-term issuer ratings to Ba3 from Ba2 and changed its outlook to negative.

The agency said Turkey's rating could be stabilized "if the Turkish authorities presented a coherent and effective economic plan in the near term that involves a material fiscal and monetary policy tightening to induce an orderly slowdown of the economy, leading in turn to lower inflation and inflation expectations as well as a reduction in the size of the current account deficit."

"Significant external financial support would likely act as a supportive factor to the rating," it added.