Domestic political risk was already embedded in Turkey’s current rating, Moody’s said on Wednesday in comments emailed to Reuters.
Moody’s considers that domestic political risk represents a material risk in Turkey which is embedded in the current rating of Baa3/stable outlook, the rating agency said in a short comment.
However, sudden and sustained halt in capital inflows into Turkey may exert downward pressure on the rating, according to Moody’s.
Moody’s lifted Turkey’s credit rating to investment level in May 2013.
Earlier this week, another rating agency Fitch commented that market reaction to the political crisis in Turkey highlights the capacity for domestic shocks to damage investor perceptions of sovereign creditworthiness.
The political current crisis remains very fluid and has not yet had a material adverse impact on the macroeconomic outlook, which was identified as a rating sensitivity in October, Fitch said in a non-rating action commentary on Tuesday. Further political and social unrest is possible ahead of this year's local and presidential elections and if the corruption scandal drags on, it could weaken the government and undermine its ability to take timely policy measures that would maintain economic stability, according to Fitch.
| Turkey's Ratings | |
| Fitch | BBB- |
| Moody's | Baa3 |
| Standar & Poor's | BB+ |
| JCR | BBB- |
| Source: Rating Agencies | |
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