Washington-Sana
Standard & Poor's lowered its outlook for Turkey's credit rating from stable to negative at a time when the country is burdened with high inflation and a deteriorating currency.
Standard & Poor's indicated, during the explanation of its aforementioned decision, and according to what was reported by AFP, that the rise in prices and the decline in the exchange rate of the Turkish lira are described as risks, adding, "So our negative expectation reflects what we consider to be increasing risks to Turkey's economy based on external debt over the coming months of Extreme currency fluctuations and rising inflation amid mixed signals about public policies.”
Standard & Poor's did not change its rating on the Turkish debt, but warned that this could change if the policies of the government of the Turkish prime minister further undermine the exchange rate of the lira and exacerbate inflation expectations, which increases the risks of a default in the banking system.
Turkey's annual inflation rate exceeded 20 percent, at its highest level in three years, after the President of the Turkish regime, Recep Tayyip Erdogan, appointed in the Central Bank loyalists who agree with his unconventional economic theories, which consider that high interest rates contribute to raising inflation, not reducing it.
Erdogan's move came as part of efforts to boost his declining popularity ahead of elections expected in 2023.
The credit rating agency, Moody's, had expected the day before yesterday that the consumer price index in Turkey would exceed 25 percent in the coming months, and that another possible interest rate cut in December would further reduce its expectations and view of the Turkish economy.
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