S&P: Fund Investigation in Turkey Will Not Pressurize Rating If It Remains Isolated

S&P Global Ratings officials reported that they do not expect the fund investigation and liquidation process currently underway in Turkey to create downward pressure on the country's credit rating, provided it remains limited to a narrow asset class.

Evaluation Schedule

S&P Global Ratings is expected to publish its second credit rating and outlook evaluation for Turkey this year on October 16.

In its latest review in April, the agency affirmed Turkey's credit rating at "BB-/B" and kept the outlook as "stable".

Investigation and Policy Response

Karen Vartapetov stated that they found the regulatory measures and policy response within the scope of the fund investigation to be prompt and convincing.

It was noted that there is no strong evidence indicating the process has spread to the broader financial system or disrupted the perception of confidence.

Economic Expectations

S&P projects average inflation to realize at around the 30 percent level this year.

Economic growth, on the other hand, is expected to finish at a rate close to 3 percent.

Market and Banking Sector

Regina Argenio stated that the most prominent effect of the fund process has been observed as a decline in the stock market and equity valuations.

It was expressed that after the initial correction, valuations have stabilized and no major movement has been observed in banking liquidity.