World Economy

Turkey Wants Fitch to Reassess Credit Rating

Turkey Wants Fitch to Reassess Credit RatingTurkey Wants Fitch to Reassess Credit Rating

Turkey’s finance minister urged Fitch to reassess Turkey’s credit rating because the country is “growing at a sustainable pace” despite external challenges.

Markets are looking ahead to Fitch’s announcement of Turkey’s credit rating and economic outlook, which is due on Friday, Albawaba reported.

Mehmet Simsek said it would be a “mistake” if Fitch downgraded Turkey’s rating because the country is growing at a “moderate but sustainable pace” despite external factors including the conflicts on its doorsteps and Europe’s fragile economic recovery.

“Let’s look at the whole picture. We have political stability and fiscal discipline,” Simsek said during an interview with Turkey’s Bloomberg HT television, adding that he did not expect Fitch to downgrade the country’s rating anyway.

“It would be a mistake to downgrade Turkey’s credit rating because of the possibility of an interest rate hike from the US Federal Reserve or an increase in the geopolitical tension in the region.”

Simsek said he forecast an annual growth between 3 to 3.5 percent  in 2014, adding that the government would have reached its original target of 4 percent growth for the whole year if external shocks had not emerged.

Earlier this month, Turkish President Recep Tayyip Erdogan accused Moody’s and Fitch of making politically-motivated assessments and threatened to cut off relations with them as it did with rival ratings agency S&P.

On Sunday, Erdogan again slammed the credit agencies, saying they were making “foolish statements”.

“We thought they were making assessments in a conscientious manner. But obviously we were wrong. Their assessments are politically motivated,” Erdogan said.

Erdogan, who was elected president last month after over a decade as prime minister, has been credited with turning around the Turkish economy. But external factors, including the chaos in neighbors Syria and Iraq and a pullback in liquidity by major central banks such as the US Federal Reserve, have hurt its growth more recently.

The Turkish economy sharply slowed to 2.1 percent growth in the second quarter, partly because of the rate hikes to shore up the Turkish lira. On Monday the lira continued to sag and hit a fresh eight month low against the dollar.

The currency was down 0.83 percent to 2.2832 lira to the dollar. The stock exchange was down 0.45 percent.