from Zero Hedge
Moments ago the Turkish LIra took another leg lower following what many had anticipated in the aftermath of this weekend’s events: a downgrade by a rating agency, in this case S&P. which just cut the country to BB from BB+, outlook negative.
[…] Full report:
Republic of Turkey Foreign Currency Ratings Lowered To ‘BB/B’; Outlook Negative
OVERVIEW
- Following the attempted coup in the Republic of Turkey on July 15, we believe the polarization of Turkey’s political landscape has further eroded its institutional checks and balances.
- In addition, we expect a period of heightened unpredictability that could constrain capital inflows into Turkey’s externally leveraged economy.
- As a result, we are lowering our foreign and local currency sovereign credit ratings on Turkey to ‘BB/B’ and ‘BB+/B’, respectively, from ‘BB+/B’and ‘BBB-/A-3’.
- The negative outlook reflects our view that Turkey’s economic, fiscal, and debt metrics could deteriorate beyond what we expect, if political uncertainty contributed to further weakening in the investment environment, potentially intensifying balance-of-payment pressures.