{"id":20612,"date":"2014-10-17T06:22:25","date_gmt":"2014-10-17T04:22:25","guid":{"rendered":"http:\/\/www.w-t-w.org\/en\/?p=20612"},"modified":"2014-10-17T06:30:12","modified_gmt":"2014-10-17T04:30:12","slug":"20612","status":"publish","type":"post","link":"https:\/\/www.w-t-w.org\/en\/20612\/","title":{"rendered":"Turkey’s Economic Forecasts Take a Hit with Kurdish Demonstrators Wrecking Havoc"},"content":{"rendered":"
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Mehmet Cetingulec writes:\u00a0 Rating time has come for the Turkish economy. Fitch Ratings was the first to announce its review. Contrary to the expectation that it would downgrade either the country\u2019s credit rating or outlook, the agency kept both unchanged: the \u201cstable\u201d outlook and the BBB-investment grade.<\/p>\n

The review, was expected to send the financial markets rallying. But when the markets reopened Oct. 8 after the holiday, the good news from Fitch was overshadowed by Kurdish demonstrators wreaking havoc across the country.\u00a0 The main index of the Istanbul stock exchange shed 1,400 points in a single day, plunging to a five-month low of 72,943 points. The Turkish lira, which had been expected to gain ground, slid to 2.29 against the dollar, while bond yields reached 9.78%.<\/p>\n

Then the Istanbul stock exchange made up for the losses over the Kobani protests, gaining 2,265 points to close the day at 75,208. The dollar slid from 2.29 to 2.25 Turkish lira, but moved back to 2.27 later in the day as the unrest continued. The bond yield fell to 9.48% before closing the day at 9.6%.<\/p>\n

While affirming Turkey\u2019s grade, Fitch welcomed \u201cpost-presidential election assurances that the current economic team will remain in place \u2026 as constructive.\u201d The statement added that structural reforms, a lasting reduction in the current account deficit, a more stable inflation,\u00a0 higher domestic savings and increased foreign investment could result in positive rating action.<\/p>\n

In short, Turkey is walking a tightrope. Fitch\u2019s favorable review prevented the unrest from taking a more serious toll on the markets. Pro-government media hailed Fitch\u2019s decision as a \u201choliday present,\u201d while the opposition press saw it as the \u201creward\u201d of parliament\u2019s approval of a government motion for possible Turkish military action in Syria and Iraq and the deployment of foreign forces in Turkey.<\/p>\n

Fitch\u2019s decision id not satisfy Economy Minister Nihat Zeybekci, who never misses a chance to slam ratings agencies.\u00a0 \u201cTurkey\u2019s realities indicate the credit rating should have been much higher,\u201d the minister said.<\/p>\n

In sum, the following conclusion can be made: IS has begun to make an impact not only on Turkey\u2019s exports but also on its politics and domestic security. In this climate, the good news from Fitch came as a \u201cremedy\u201d for the markets. But to get a similar good rating from Moody\u2019s in December, Kobani\u2019s shadow over the markets in particular should be removed.<\/p>\n

In short, Turkey is walking a tightrope. Fitch\u2019s favorable review prevented the unrest from taking a more serious toll on the markets. Pro-government media hailed Fitch\u2019s decision as a \u201choliday present,\u201d while the opposition press saw it as the \u201creward\u201d of parliament\u2019s approval of a government motion for possible Turkish military action in Syria and Iraq and the deployment of foreign forces in Turkey.<\/p>\n

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Mehmet Cetingulec writes:\u00a0 Rating time has come for the Turkish economy. Fitch Ratings was the first to announce its review. Contrary to the expectation that it would downgrade either the country\u2019s credit rating or outlook, the agency kept both unchanged: … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[13],"tags":[],"class_list":["post-20612","post","type-post","status-publish","format-standard","hentry","category-finance"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t