S&P raises Turkey's rating, hints amelioration if Kurdish issue solved

ISTANBUL - Anatolia News Agency

S&P upgraded Turkey's credit rating to BB. AP photo

Standard & Poor's (S&P), one of the world's leading credit rating agencies, upgraded Turkey's credit rating from BB to BB+ March 27.

S&P said the resolution of the Kurdish issue would have a positive effect on Turkey's rating.

The progress made on the Kurdish issue will lead to a decline in security-related spending and would increase border trade in Turkey, S&P cited as the reason for the upgrade.

It also added that Turkey was in the process of rebalancing its economy.

"The floating rate policy, the prudential limit on foreign loans and the deepening of the local capital market induce higher resistance to potential capital flows," S&P's statement said.

Turkey's Finance Minister Mehmet Şimşek welcomed the upgrade as "encouraging.” "We deserve a higher credit rating," Şimşek said in remarks carried by the private NTV broadcaster, emphasizing that the new rating would make it easier for Turkish companies to access funds. "Even if this evaluation does not reflect the true level that Turkey deserves, it is an important step on the awareness of the gains obtained during our government."

Meanwhile Economy Minister Zafer Çağlayan said he had been expecting such an upgrade. "But it is not enough. This upgrade only does justice to the Turkish economy."