Fitch Ratings Statement on Fund Crisis and Turkey's Economy

Following the volatility observed in investment funds in Turkey while the state took necessary measures, Fitch Ratings Senior Director Douglas Winslow announced that the current picture does not pose a systemic risk and no direct impact on the credit rating is expected.

Fund Volatility and Official Statements

Following the volatility experienced in investment funds in Turkey, the necessary measures were rapidly taken by the state. President Recep Tayyip Erdogan announced that a fully authorized board had been established and the State Supervisory Council had been assigned.

Erdogan emphasized that the country's financial system is strong, stating that the problem occurred in a limited section of the fund market and that there is no risk spread to the financial system.

Assessment from Fitch Ratings

Fitch Ratings Senior Director Douglas Winslow stated that they do not expect the developments in investment funds to have a direct impact on the Turkish economy and credit rating.

Winslow emphasized that the current picture does not pose a systemic risk and pointed out that the Turkish economy has a resilient structure against external shocks.

Resilience to External Shocks and Reserve Status

Douglas Winslow stated that Turkey's stance against external shocks is quite resilient. He conveyed that with the improvement in reserve ownership, current reserves are at a sufficient level for potential shocks.

Expressing that they expect a sudden change in the credit rating over the next few years, Winslow noted that the economic outlook is being monitored.

Inflation and Monetary Policy Expectations

Winslow stated that they expect inflation to decline to 30.5 percent by the end of the year.

He also added that they foresee the Central Bank maintaining its tight monetary policy.