Moody’s boosts Türkiye’s credit ratings, experts predict more upgrades

Moody’s, the international credit rating agency, has raised Türkiye’s credit rating by two levels from “B3” to “B1” while maintaining a “positive” outlook.

The decision was driven by notable improvements in economic governance, particularly the return to orthodox monetary policies.

Türkiye’s credit outlook

• In January, Moody’s had upgraded Türkiye’s credit outlook from “stable” to “positive.”
• S&P raised Türkiye’s credit rating from “B” to “B+” in May, maintaining a positive outlook.
• Fitch Ratings upgraded Türkiye’s rating from “B” to “B+” in March, also shifting the outlook from “stable” to “positive.”

Expert opinions on upgrade

Professor Erhan Aslanoglu, Vice Rector at Istanbul Topkapi University

• Recognized the upgrade as a significant and positive development.
• Mentioned that while the two-notch increase was somewhat surprising, it reflects positive expectations for the future.
• Stressed the importance of continuing reforms and maintaining macroeconomic stability for further upgrades.

Timothy Ash, senior emerging markets strategist at Bluebay Asset Management

• Noted the rarity of a 2-notch upgrade.
• Emphasized the significance of this move in aligning Moody’s rating of Türkiye with that of S&P and Fitch Ratings.
• Credited Finance Minister Mehmet Simsek’s reforms for this positive development.
• Believed the upgrade and positive outlook signal further improvements ahead.

Haluk Burumcekci, finance analyst, economist at Anadolu Agency

• Highlighted that Moody’s lagged behind other credit rating agencies and needed to catch up.
• Predicts that all major rating agencies are now aligned on Turkey’s positive outlook, forecasting another notch increase in their subsequent decisions.

Ismet Demirkol, founder of Pariterium Consulting

• Asserted that the continuation of orthodox monetary policies by the Central Bank of the Republic of Türkiye (CBRT) and fiscal support against external financial vulnerabilities contributed to the two-notch upgrade.
• Predicted that Moody’s decision could lead to a decline in Türkiye’s 5-year credit default swap (CDS) rates.
• Expected similar upgrades from S&P and Fitch Ratings.
• Highlighted the potential for increased foreign capital inflows and sustainable direct foreign investments, especially by 2025, because of this upgrade.