Turkey plans to establish local credit rating agency

ISTANBUL

Deputy Prime Minister Ali Babacan announced that the government plans to establish a local credit ratings agency. DHA photo

The government has directed the Banks Association of Turkey (TBB) to establish a local credit ratings agency, Deputy Prime Minister Ali Babacan has said.

“There are three or four local credit ratings agencies but they are small in size. We told TBB to found a new one that will have a higher status,” he said, in a broadcast by TGRT television on March 7. TBB has been working on it, he added.

However, Turkey’s economic indicators were higher than the notch given by agencies, Babacan said, adding that putting pressure on agencies to upgrade the notch was wrong. 

Standard & Poor’s said in January that it would no longer offer a full rating service for Turkey following a spat between the two sides. The country responded angrily last May when S&P cut the outlook on its “BB” sovereign credit rating from positive to stable. Prime Minister Recep Tayyip Erdoğan warned Ankara may no longer “recognize” the agency, calling its decision “ideological”. 

Fitch upgraded Turkey to an investment grade of BBB in November, citing its moderate and declining levels of public debt. Fitch is the only ratings institution among the top three to have kept Turkey in the “investible” category.

Turkish investors expects a possible upgrade by Moody’s but the agency has made it clear that Turkey’s ongoing vulnerabilities were holding the country back.