Scottish bank executive says S&P's Turkey rating wrong

Scottish bank executive says S&P's Turkey rating wrong

This image of Timothy Ash, Royal Bank of Scotland Plc chief emerging markets economist, is taken from a video titled “Timothy Ash - Emerging Markets”. (Photo: Today's Zaman)

May 04, 2012, Friday/ 14:25:00

The head of Royal Bank of Scotland's (RBS) Emerging Markets Research said on Friday that international rating agency Standard & Poor's (S&P) Turkey rating was wrong.

Timothy Ash is the first international economist to support Turkish Prime Minister Recep Tayyip Erdoğan's reaction to S&P's decision to revise Turkey's rating to stable from positive. Ash said Erdoğan was right and that S&P's rating was wrong and he further noted that Turkey was a country that was robust and had high repayment power.

S&P said on Tuesday that it cut its outlook on Turkey's long-term foreign and local currency sovereign credit ratings to stable from positive due to “less-buoyant external demand and worsening terms of trade [which] could inhibit Turkey's economic rebalancing.”

Turkey definitely deserved a better rating, Ash said. He added that Turkey was fulfilling its liabilities and trying to solve its main problems, which should be taken into consideration by the international rating organization.

Turkey had fulfilled its liabilities after the economic crisis of 2001 despite many predicted scenarios, Ash said. The RBS official further said international markets considered Turkey an investable country. Something is wrong, either the markets or the rating organization is wrong, he also said.

Known for his research on Turkey since 1999, Ash said markets have not taken this unjust rating into consideration and that Turkey deserved a better rating with its repayment power and financial structure. He also said Turkey's rating should have been two or three degrees over this current rating, adding that Turkey already deserved an investable country rating.

On Thursday, premier Erdoğan lambasted S&P over its revision of Turkey's outlook and said: “This is totally an ideological decision. No one would buy that. And we shall declare that we do not recognize you any more as a credit rating agency. This is absolute nonsense even as you upgrade [ratings on] Greece, which still teeters on the edge of bankruptcy.”

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