Fitch Ratings Senior Director and Turkey Analyst Erich Arispe Morales emphasized that the determination regarding Turkey’s economic policies continues. “Policies need to be tightened to reduce inflation sustainably,” he said. Fitch Ratings evaluated the effects of Turkey’s credit rating upgrade.
VULNERABILITY IS DECREASING, CURRENT ACCOUNT DEFICIT IS NIGHTLING
Morales stated that economic vulnerabilities have decreased in Turkey and the narrowing of the current account deficit continues. He also said that the decline in energy and gold imports had a positive impact on the current account deficit and that international reserves increased.
KEY POLICY CHALLENGE: INFLATION
Stating that the main policy challenge in Turkey right now is inflation, Morales stated that the determination observed in economic policies has increased. Steps such as the increase in the policy interest rate of the Central Bank of the Republic of Turkey (CBRT) and the approval of the economic program by the political authority were considered indicators of this determination.
RETURN TO ORTHODOX ECONOMIC POLICIES AND BANKS
Lindsey Liddell, Head of Emerging Market EMEA Bank Ratings at Fitch, stated that the return to orthodox economic policies and the tightening of monetary policy are positive for banks. He also added that an increase in the issuances of Turkish banks has been observed, but some risks continue.
Other managers of Fitch Ratings also made evaluations at the panel.
