Standard & Poor (S&P)’s has assigned its B+ rating to the Republic of Turkey's $1.5 billion eight percent 30-year global notes due February 14, 2034.
The rating agency’s B+ long-term and B short-term sovereign credit ratings on Turkey reflect the government's continued commitment to the International Monetary Fund
(IMF)-supported Stand-by Arrangement, which underpins impressive improvements in inflation, fiscal performance, and growth prospects, says Credit Analyst Marie Cavanaugh.
External indicators are also strengthening due to rising reserves, which, in combination with the floating exchange-rate regime, significantly mitigate the risk of another crisis.
The ratings on Turkey remain constrained by its high public sector debt and limited fiscal flexibility. "However, recent improvements in these areas will be reinforced if the government continues to make strenuous efforts to reach its public sector primary surplus target under the IMF-supported program and if real interest rates continue to decline," Cavanaugh said.
"Despite the government's repeated declarations of its commitment to the IMF-supported program and its huge parliamentary majority, adhering to its fiscal and structural reform pledges fully and in a timely manner will remain challenging," the analyst concluded. — (menareport.com)
© 2004 Mena Report (www.menareport.com)
