Speaking to the Anatolia news agency, Lindow noted that so far there is no reason to raise the Turkish government’s Ba3 bond rating. Lindow cited the debt payment capacity of the government as the Turkish economy’s most significant problem, noting that revenues were allocated for only interest payments. Expressing approval about the decision of the Central Bank of Turkey to decrease interest rates, she stressed that if the public financers can govern the situation successfully, the debt pressure might be eased.
Lindow, stressing that fiscal rule is of great importance in terms of providing long term sustainability of fiscal discipline and enhancing the economy’s predictability, suggested that a law to support fiscal rule which will help increase debt payment will have a positive impact on the rating eventually. She cited macro-political predictability as the second most important issue of the Turkish economy.
As for the main reason behind the change of outlook for Turkey from stable to positive in September, Lindow indicated the economy’s improved resilience to shocks. The government did not have to rely on external support to surmount the global financial crisis, she added.
Moody’s last rating action on Turkey was taken on May 24, 2006, when the country ceiling for foreign currency debt was upgraded to Ba1 from Ba3. Prior to that, Moody’s last changed the debt ratings of the Turkish government on Dec. 14, 2005, when they were upgraded from B1 to Ba3.
