T\u00fcrkiye<\/a>\u2019s credit rating at \u201cBB-\u201d and its rating outlook as stable on July 17, Erich Arispe Morales stated that the decision was consistent with the credit rating agency\u2019s unscheduled assessment for the country in April amid the impact of the U.S.-Israel-Iran war.<\/p>\nMorales noted that T\u00fcrkiye\u2019s international reserves declined during these turbulent times but they had since somewhat recovered.<\/p>\n
\u201cWe have reserves that have recovered somewhat but remain below the February levels or pre-war levels,\u201d he told Anadolu Agency.<\/p>\n
\u201cWe have seen that inflationary pressures have also eased somewhat, but of course we are currently in a situation in which still there\u2019s a high degree of political uncertainty which can have implications, of course, not only for T\u00fcrkiye, but for other emerging market in terms of risks of higher energy prices and what that means for inflation, but also for external balances,\u201d he added.<\/p>\n
Morales stated that the risks caused by the war continued to beget a high degree of political uncertainty for regional economies.<\/p>\n
\u201cHowever, what we highlight as a positive factor is that, in spite of the increased uncertainty and the decline of reserves, policy settings have been as such to maintain, or at least avoid, a significant reversal in the gains that we\u2019ve seen in terms of inflation dynamics, especially those related to inflation expectations,\u201d he said.<\/p>\n
\u201cWe have also seen the positive dollarization remains relatively stable at 38 percent and that the communication we get from authorities at the central bank, but also policymakers in the economic sphere, is that the there is still commitment to the program in terms of bringing sustainable inflation down, after revising the outlook to stable from positive back in April, there\u2019s still an overarching theme of global uncertainty, so we think that there\u2019s resilience in T\u00fcrkiye, but of course this uncertain geopolitical scenario presents a risk for all emerging markets, including T\u00fcrkiye,\u201d he added.<\/p>\n
Morales stated that while T\u00fcrkiye\u2019s inflation remained high, signs of slowdowns also continued.<\/p>\n
He noted that the above-30 percent inflation might take some time to slow down, and that it \u201crequires continued commitment and to reveal the policy credibility buffers, that\u2019s an important component.\u201d<\/p>\n
Morales emphasized that the healthy banking sector and the capacity to access external financing in T\u00fcrkiye were helping reduce inflation sustainably, alongside policies, while real interest rates had reached a level that would contribute to the attractiveness of Turkish lira-denominated assets, preventing dollarization.<\/p>\n
\u201cI think that one thing is to think about the capacity from the policies over access to financing, the health of the banking sector that gives T\u00fcrkiye the capacity to withstand external shocks,\u201d he said.<\/p>\n
He noted that Fitch was closely monitoring T\u00fcrkiye\u2019s international reserves as achieving a \u201cdurable\u201d improvement was key in a potential credit rating upgrade.
\u201cIf combined with external financing requirements, which are relatively high for T\u00fcrkiye, I think what is important there is the word \u2018durable,\u2019\u201d he said.<\/p>\n
\u201cAnd the other [factor] is the maintenance of these policy settings that are sufficiently tight to support a marked decline in inflation over time, as well as reducing the macro imbalance of payment risk, I think this is important to build this confidence in an environment that can see external shocks and political pressures or uncertainty,\u201d Morales added.<\/p>\n
Morales stated that the Turkish Central Bank considered high geopolitical risks and pressure on energy prices when determining the extent of monetary policy easing, expecting some dovish policy later this year, based on the assumption that geopolitical risks would ease, and energy prices would decline.<\/p>\n
\u201cWe have an average of $87 per barrel of Brent this year and that\u2019s consistent of some easing later in the year, which takes us to end-2026 policy rate of 35 percent, that\u2019s 200 basis points below what the current level,\u201d he added.<\/p>\n","protected":false},"excerpt":{"rendered":"LONDON \/ ISTANBUL The Turkish economy demonstrates its resilience against external macroeconomic shocks despite a highly volatile global…\n","protected":false},"author":2,"featured_media":707827,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,146687,40706,56,54,55],"class_list":["post-707826","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-fitch","tag-trkiye","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/707826","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=707826"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/707826\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/707827"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=707826"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=707826"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=707826"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
![\"Fitch:](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/07\/6a60ba135625e6181d3ff03c.jpg\")
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