Fitch Upgrades Turkey's Sovereign Ratings To 'BB+', Outlook Stable

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Fitch Ratings on Thursday upgraded Turkey's long-term foreign currency Issuer Default Rating (IDR) to 'BB+' from 'BB-', with a stable outlook. The firm also upgraded the long-term local currency IDR to 'BB+' from 'BB', while it affirmed the short-term foreign currency IDR at 'B'.

"The upgrade reflects Turkey's relative resilience to the severe stress test of the global financial crisis and some easing in prior acute constraints related to inflation, external finances and political risk," said Edward Parker, Head of Emerging Europe in Fitch's Sovereigns team.

Fitch said that Turkey's relative resilience to the financial crisis showed that credit fundamentals and debt tolerance are stronger than previously thought, pointing out that the nation has not yet needed an emergency IMF bailout to support its banking sector. The agency forecasts the Turkish economy to contract 6% in 2009, but grow 4% in 2010.

Public finances, however, have deteriorated, Fitch noted. The agency forecasts central government budget deficit on IMF definitions to widen to 7.6% of GDP in 2009 and 5.6% in 2010, from 3% in 2008.

Fitch Ratings on Thursday upgraded Turkey's long-term foreign currency Issuer Default Rating (IDR) to 'BB+' from 'BB-', with a stable outlook. The firm also upgraded the long-term local currency IDR to 'BB+' from 'BB', while it affirmed the short-term foreign currency IDR at 'B'. (Market News Provided by RTTNews)