S&P downgrades Turkey's sovereign credit rating after failed coup attempt

PARIS - Agence France-Presse

Ratings agency S&P on July 20 downgraded Turkey's sovereign credit rating after July 15 failed coup attempt. 

"Following the attempted coup in the Republic of Turkey on July 15, we believe the polarisation of Turkey's political landscape has further eroded its institutional checks and balances," said the agency, warning of "a period of heightened unpredictability."

“In addition, we expect a period of heightened unpredictability that could constrain capital inflows into Turkey’s externally leveraged economy,” S&P added in a statement after lowering the foreign and local currency sovereign credit ratings a notch.

“The negative outlook reflects our view that Turkey’s economic, fiscal, and debt metrics could deteriorate beyond what we expect, if political uncertainty contributed to further weakening in the investment environment, potentially intensifying balance-of-payment pressures,” S&P warned, saying it had put Ankara on negative watch.

S&P estimated Turkey must roll over just under half of its total external debt -- which it put at around $170 billion -- over the next 12 months.