International credit rating agency Moody downgraded the Turkish credit rating ladder to B1 while Baa3 'T. Display is left negative. In a statement on the decision made by Moody's discount & # 39; in Turkey's rating reflects our view that payments continue to increase the risk of crisis in balance. acute and devastating payment of the Turkish crisis to believe that fragility of balance when note B is a more appropriate level, & # 39; & # 39; he said.
Statement & # 39; & # 39; the decline in foreign exchange reserves of the Turkish Central Bank and expressing more concern about independence & # 39; & # 39; expression used. & # 39; & # 39; Turkey's foreign currency reserves are declining for a long time the Central Bank seems to contradict continuing the policy set does not allow free float. Turkey's foreign currency reserves and their buffer for the weak 2-year economy are expected to weaken further in short-term liabilities compared to the overall # valuation made.
Moody's has created uncertainty in Istanbul's choice again, faced with the US S-400 crisis and the Turkish economy will consider possible sanctions to pressure the US Congress and declare that the financial system is.
UNDER FOUR INVESTMENT LEVELS
Moody's B1 is four digits below the investment rating. Standard & Poor's also rated Turkey at the same level as B + class. Fitch evaluates two levels below the investment rating with BB.
TREASURY AND FINANCIAL DEPARTMENT: DECISION is not in accordance with the KEY INDICATORS OF THE TURKEY ECONOMY
The Ministry of Finance and Finance reacted to the decision. A statement from the Department "Moody's decision is not in accordance with indicators of economic fundamentals. Objectivity and impartiality of the organization's analysis in creating Turkish question marks" said the statement.
The organization stressed that Turkey is 2.6 times more than debt reserves, further Moody notlandırıg from Turkey, this ratio is noted that more than Turkey, even in some developing countries.
The Ministry description says: & # 39; & # 39; The international credit rating agency Moody issued a decision to downgrade by, not in accordance with Turkish economic fundamental indicators and because the organization in terms of objectivity and impartiality analysis created question marks. The reserve organization's assessment of Turkish debt has stressed that more than 2.6 times. This figure is far above us even in some developing countries where Moody's ranks higher than us.
In addition, almost half of short-term foreign debt also belongs to the banking sector, Turkish banks and Turkey's real sector, Turkey's perception is quite bad, CDS spreads from rising too high from August to September 2018 can even renew their debt. In the first quarter of this year, the debt rollover ratio was 128% for the banking sector and 165% for the real sector.
Furthermore, even though foreign exchange reserves assume certain limits have been agreed at the international level, according to the World Bank, when the end of five years we see the adequacy of average reserves measured through Turkish imports from development could be described as similar to Turkey remaining close to European countries .
Another factor that must be considered when evaluating economic vulnerability is the level of debt of economic actors. Turkey, when both economies total, appears at each level of economic actors as a strong enough performance of the göstermektedir.2018 end of the year, the average GDP of the total debt of developing countries the market is realized as 212.6%, this rate of 156% in Turkey, 8. Similarly, while Turkey's public sector debt ratio to GDP is 33.6%, the average of emerging markets is 49.7%.
While Turkey's household debt burden is 14.7% of GDP, the developing market average is 37.6%. Our financial sector debt burden is 33% of GDP. On the other hand, the increase in the market average was 33.6%. While the total debt of our real sector is 75.5% of our GDP, the average of emerging markets is 91.7%.
Besides all of this data:
* Completion of recapitalization of state banks,
* Reduction of imports in the balance of payments and an increase in exports caused by the elimination of foreign exchange needs in real terms,
* To facilitate access to finance for export-oriented companies and to implement other reform agendas determined by the IVME package,
* Trend of decreasing inflation,
* Increase tourism income,
* We are sorry to see that the Ministry of Justice's Reform Reform Strategy Document and many other positive developments have been ignored.
The problem of institutional independence and the sherbet free market, which does not even need to be explained under normal circumstances, is handled unfairly by the Credit Rating Agency. Regarding the independence of the Central Bank and the policies taken by the Central Bank, Turkey has remained an exchange rate regime and the negative consequences of independent monetary policy have not been experienced heavily with the 2001 crisis.
basic elements of economic policy adopted by Turkey since 2003, in all situations to meet the requirements of a free market economy Today the floating exchange rate, because it lies in the liberalization of capital flows and the center of entrepreneurial economic policy we are pushing for what is otherwise the Republic of Turkey today nothing will happen tomorrow. & # 39; & # 39;
– T.C. Ministry of Finance and Finance (@HMBakanligi) June 14, 2019