Professionals disagree with Moody’s decision

BURSA - Hurriyet Daily News

President Gül’s adviser Yılmaz says Turkey deserves a higher credit rating. Hürriyet photo

Finance professionals have reacted negatively to a decision by international rating agency Moody’s to review the credit ratings of leading Turkish lenders whose standalone credit assessments are currently above the country’s sovereign debt rating, calling the move “unusual” and “unfair.”

“Rather than focusing on such reviews, international rating agencies should consider increasing Turkey’s rating to investment grade,” said Durmuş Yılmaz, the chief economy adviser to Turkish President Abdullah Gül and a former Central Bank governor. 

“Turkey’s credit note should have already been at investment level,” Yılmaz told the Hürriyet Daily News on the sidelines of the first Uludağ Economy Summit in the northwestern province of Bursa. “Unfortunately, some investors from European corporations still have to invest in the countries which have an investment [grade].”

Moody’s expects to position the standalone credit assessments of most banks globally at or below the domestic sovereign’s rating – which in the case of Turkey is Ba2 – with a positive outlook, according to an official statement from the agency.

Moody’s will also reassess its assumptions about government support as applicable to each Turkish bank.

The ratings of some Turkish lenders could well be higher than the credit rating of the country itself, İşbank General Manager Adnan Bali said on the sidelines of the Uludağ event.

“Even this decision by Moody’s demonstrates the legitimacy of Turkey’s ongoing demands of a rate increase for the country,” he said.

Declaring the decision “rather unusual,” Bali said there needed to be a clearer picture of Turkey’s current account deficit slowdown trend in order to guarantee a rate increase from the international rating agencies.

“I do not expect a rise in the rating note even though the country’s economy deserves an increase,” he said.