Fitch rates Turkey's stable outlook with BBB-, BBB

Türkiye Materials 21 March 2015 02:55 (UTC +04:00)

The international credit rating agency, Fitch, affirmed Friday Turkey's long-term foreign and local currency Issuer Default Ratings at BBB- and BBB, respectively with a stable outlook.

"The issue ratings on Turkey's senior unsecured foreign and local currency bonds have also been affirmed at 'BBB-' and 'BBB', respectively. The country ceiling has been affirmed at 'BBB' and the short-term foreign currency IDR at 'F3'," said the agency in a press release.

"Falling oil prices have contributed to lower inflation and a faster contraction of the current account deficit (in Turkey), notwithstanding sharp falls in exports to Russia, Ukraine and the Middle East. Public finances remain robust with no sign of fiscal slippage ahead of the general election in June, while the banking system remains in good shape for the most part, unaffected by developments at Bank Asya", it said, adding that the economy continues to show signs of rebalancing.

On Feb. 4, the Savings Deposit Insurance Fund, the agency responsible for resolving failed banks, took over the management of the Bank Asya and appointed a new chief executive officer and board of directors. Regulators have found that the bank did not comply with transparency requirements with respect to disclosure of Bank Asya's partnership structure.

Turkish banking regulators have also seized management of some preferred shares in Bank Asya held by publisher Surat Basim and construction company Forum Insaat; regulators cited irregular share transfers to a Dutch firm in January.

Bank Asya was founded by business figures who had alleged links with the U.S.-based preacher Fethullah Gulen's "hizmet" movement, which is accused of illegal activities by Turkish judicial authorities including attempting to undermine the country's elected government.