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Standard & Poor’s upgrades Turkey to investable

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Standard & Poor’s upgrades Turkey to investable   (22.09.2011)

Standard & Poor’s raised its local-currency sovereign ratings on Turkey to BBB-/A-3, an “investable” level, on Tuesday, just one day after it cut Italy’s rating due to the European country’s fiscal and political weaknesses.The rating agency kept the foreign-currency sovereign rating on Turkey at BB, two levels below investment grade

“The local-currency upgrade reflects our view of continuing improvements in Turkey’s financial sector and the deepening of local markets,” Frank Gill and Leila Butt, London-based analysts at S&P, wrote in a statement on Tuesday. “The Turkish banking system is adequately capitalized and we expect the state will reduce its holding of some public-sector commercial banks.”

Gill is scheduled to join a press meeting in Istanbul on Wednesday on the agency’s new presence in Turkey along with Yann Le Pallec, head of corporate and government ratings in Europe, Middle East and Asia

The higher rating for local-currency debt “says that they are less worried by public finances, but are still worried by the external financing position,” Timothy Ash, chief emerging-markets economist at Royal Bank of Scotland Group, said in an e-mailed statement. “Still welcome news.”

I was expecting such a decision but it is not enough,” said Turkish Economy Minister Zafer Çağlayan in a written statement after the decision. “Our foreign-currency investment rating should also be upgraded.

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