Fitch lowers the rating of Turkey in the face of instability in post-coup – lalibre.be

International

The agency Fitch lowered on Friday the credit rating of Turkey from BBB – to BB+, due to the period of instability opened by the aborted putsch of July 15, and the impact of the purges carried out by Ankara.

“The political and security developments have weakened the economic performance (…). The extent of the purge, which extended to the media and other groups, has disrupted some economic actors,” says the agency in its press release.

Since a failed coup attempt of July 2016, the regime of president Recep Tayyip Erdogan has launched a vast campaign of repression, which resulted in the arrest of more than 40,000 people and the dismissal of 100,000.

Fitch is also concerned about the project of constitutional reform, which would significantly enhance the executive power of turkey and will extend, according to the agency, “a system where the counter-powers have been weakened”.

The authorities have also failed to address the “older vulnerabilities external”, which are translated into a collapse of the Turkish lira against the dollar or the euro.

The shrinking of the currency reserves of Turkey, “makes it vulnerable to external shocks”, emphasizes the agency, which assigns the new notes a stable outlook excluding a priori a further reduction in the medium term.

at the End of January, the rating agency Standard and Poor’s had it, downgraded to negative the ratings outlook of Turkish, questioning the capacity of its leaders to control inflationary pressures and currency exchange rates.