Fitch Ratings has downgraded Turkey's Long-Term Foreign Currency Issuer Default Rating (IDR) to 'B+' from 'BB-'. The Outlook is Negative, Report informs, citing the agency.
"Turkey's ratings reflect weak policy credibility and predictability, high inflation, low external liquidity relative to high external financing requirements and dollarisation, and geopolitical risks," the agency said.
Fitch does not expect the authorities' policy response to reduce inflation, including FX-protected deposits, targeted credit and capital flow measures, will sustainably ease macroeconomic and financial stability risks.
Fitch Ratings forecasts inflation to reach 38% by the end of the year and average 41% in 2022 and 28% in 2023, the second highest among all Fitch-rated sovereigns.
The collapse of the Turkish lira on November 23 by 18% was the highest in the last 20 years. The dollar exchange rate reached a record 18.4 liras per $1 on December 20, while in January last year, $1 was worth 7.4 liras.