S&P Global Ratings has downgraded Turkey's foreign debt because of concerns over the country's deteriorating finances, high inflation and weakening lira, all of which we have previously highlighted. Turkey's foreign currency sovereign credit rating was reduced to BB-/B. "Our downgrade reflects our view that there is a risk of a hard landing for Turkey's overheating, credit-fuelled economy," said the agency, adding that "signs of distress in the private sector are starting to show, and capital outflows and the lira's depreciation may accelerate this trend". Turkey's rate of inflation is five percent, more than double the central bank's target.
S&P Global Ratings has downgraded Turkey's foreign debt because of concerns over the country's deteriorating finances, high inflation and weakening lira, all of which we have previously highlighted. Turkey's foreign currency sovereign credit rating was reduced to BB-/B. "Our downgrade reflects our view that there is a risk of a hard landing for Turkey's overheating, credit-fuelled economy," said the agency, adding that "signs of distress in the private sector are starting to show, and capital outflows and the lira's depreciation may accelerate this trend". Turkey's rate of inflation is 10.23%, more than double the central bank's target.