Moody’s avoids Turkey statement, says review is ongoing after coup attempt

NEW YORK

Global rating agency Moody’s avoided issuing a statement for Turkey on Aug. 5, saying its review of the country’s Baa3 rating was continuing.

The agency announced on July 18, three days after the failed coup attempt in Turkey, that it would begin a “review for downgrade” of the country’s credit rating.

In its statement on Aug. 5, Moody’s said it would complete its review within 90 days of the July 18 announcement.

The statement said although the putsch failed, Moody’s would continue to assess the medium-term effect of the crisis and its aftermath.

Speaking of the attempted coup, Moody’s said it “is likely that it will exacerbate existing challenges in” areas of Turkey’s policy-making institutions and business climate, the country’s external buffers to absorb potential shocks and its growth prospects.

Moody’s has a number of typical dates in a yearly calendar on which it announces  statements on Turkey, including one in the first week of August, which has now passed.

Aside from the conclusion of the ongoing three-month review, the only remaining date this year when the agency is expected to make a statement is Dec. 2.

The last time Moody’s took a rating action on Turkey was last year, when it confirmed the country’s rating at “Baa3” and its outlook as “negative.”

“Our economy is still as steady as a rock. There was not even a minor economic shock. But, this situation disturbed some sides,” Turkish Prime Minister Binali Yıldırım said during a press conference in Ankara on Aug. 2. 

Those unnerved included Standard and Poor’s, which decided to cut Turkey’s rating, a decision which depicted the company’s “bias,” according to Yıldırım. 

Many other Turkish officials said there was no need for Moody’s to cut its rating. 

Moody’s and Fitch would tarnish their own reputations if they declared negative ratings for Turkey’s economy, the chief economic adviser to Turkey’s president told Anadolu Agency on Aug. 1.

 “I believe these agencies will not declare a negative rating that may disturb their reputation considering the positive macroeconomic indicators of Turkey’s economy,” Cemil Ertem said.