S&P fund investigation assessment: Will it affect the credit rating?

S&P Global Ratings officials Karen Vartapetov and Regina Argenio discussed the potential impacts of the fund investigation conducted in Turkey on the country's credit rating. Noting that the pursued policies have been rapid and convincing, the officials recorded that they do not foresee negative pressure regarding the rating as long as the process remains limited.

Credit Rating and Investigation Expectations

S&P Global Ratings officials Karen Vartapetov and Regina Argenio evaluated the potential reflections of the ongoing fund investigation on Turkey's credit rating. Vartapetov stated that they do not expect downward pressure on the credit rating, provided the process remains isolated and a strong policy response is given.

Policy Response and Market Conditions

Karen Vartapetov stated that the regulatory measures taken by authorities within the scope of the fund investigation were rapid and convincing. Noting that the process has been brought under control, Vartapetov recorded that no significant negative reaction was observed in areas such as the exchange rate, dollarization, and banking liquidity.

Economic Growth and Inflation Forecasts

Vartapetov stated that they expect the Turkish economy's average inflation this year to be around 30 percent, and economic growth to be close to 3 percent. He emphasized that reserve adequacy is one of the key indicators for the credit rating.

Household Trends and Dollarization

Stating that households' confidence in the Turkish lira and domestic currency-denominated assets is being monitored closely, Vartapetov conveyed that despite challenges, they do not see a clear sign that dollarization is rising again.

Outlook for the Stock Market and Banking Sector

Regina Argenio stated that the most prominent impact of the fund process was experienced in the stock market, and valuations stabilized following the initial correction. Argenio expressed that they have not observed a major movement in banking liquidity and that liquidity has been provided to the market.