Turkish economy minister slams Fitch’s political risk warning

ANKARA

Turkey's Economy Minister Nihat Zeybekci speaks during an interview with Reuters in Ankara August 11. REUTERS Photo / Murad Sezer

Economy Minister Nihat Zeybekci has lashed out at ratings agency Fitch over its statement warning of the continuation of political risks in Turkey following Recep Tayyip Erdoğan’s presidential election win, only days after targeting its fellow agency Moody’s.

“It is impossible for us to regard the institution [Fitch] that issues political risk warnings after our history’s most important and democratic elections as objective,” the minister wrote on his Twitter account on Aug. 12.

“You have to be blind and ignorant to not to see the intention behind Fitch’s decision,” he blasted.
The agency, which has become the target of the minister’s harsh words, had released a statement Aug. 11, sharing its views on the impact of the Turkish elections and the economic outlook.

“Erdoğan’s outright victory in Aug. 10’s vote, in the first round of Turkey’s first popular presidential election, does little to ameliorate the political risk to Turkey’s sovereign credit profile,” Fitch Ratings said.

“Political risk will weigh on Turkey’s ratings through its potential effects to discourage capital inflows and reduce policy predictability.”

Zeybekci accused Fitch “and its counterparts” of failing to foresee any economic developments, including the 2008 financial crisis and overlooking the Turkish economy’s “strengths.”

Over the weekend, the minister had criticized Moody’s, as well after the agency ignored announcing an anticipated credit rating for Turkey.

“We won’t allow anyone to speculate about Turkey. The credit rating that was to be announced ahead of the [presidential] elections was meaningful for us,” the minister had said on Aug. 9.

Arguing that agencies usually make “politically biased decisions,” Zeybekci had said last week that he expected the ratings agency to give a negative outlook for Turkey, triggering a significant sell off in the stock market and depreciation in the Turkish Lira.

Meanwhile, another rating agency Standard & Poor’s (S&P) also released a statement after the elections, saying the outcome will not impact Turkey’s current sovereign credit rating of BB+.

A change in macroeconomic policy is not expected because Erdoğan was elected in the first round and his successor as premier would be from the ruling Justice and Development Party (AKP), the credit agency said.