Moody’s says Turkish early elections prolong economic policy indecision

By bne IntelliNews August 27, 2015

New elections so soon after previous elections are credit negative for Turkey, rating agency Moody’s said on August 27.

Prolonged political uncertainty will delay implementation of economic policies needed to reduce external vulnerabilities, improve investment climate and reactivate economic growth, added the rating agency.

Moody’s skipped Turkey’s credit rating update, expected on August 7, without giving any reasons. Moody’s sovereign release calendar for 2015 suggests that it may assess the country’s rating outlook on December 4.

Moody’s currently rates Turkey at Baa3, the lowest investment grade, with negative outlook.

S&P, another rating agency, said last week that the uncertain political landscape could weaken the policy response to both external and domestic events, including potential capital outflows.

S&P thinks Turkey is unlikely to regain a stable government before the end of 2015.

The new elections will be held on November 1.

Turkey's Ratings    
  Rating Outlook
Fitch BBB- Stable
Moody's Baa3 Negative
S&P BB+ Negative
Source: Rating Agencies

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