Banking

Fitch cuts Turkey's credit rating deeper into junk territory

Credit: REUTERS/Reinhard Krause

Ratings agency Fitch on Friday downgraded Turkey's sovereign debt rating to "B+" from "BB-" saying the government's policies have increased risks from high inflation and weak foreign currency liquidity.

Adds details from Fitch statement, background

Feb 11 (Reuters) - Ratings agency Fitch on Friday downgraded Turkey's sovereign debt rating to "B+" from "BB-" saying the government's policies have increased risks from high inflation and weak foreign currency liquidity.

An unorthodox economic policy driven by President Tayyip Erdogan has seen the country slash interest rates despite soaring inflation, hammering the lira and sending consumer prices to a two-decade high.

‍"Policy-driven financial stress episodes of higher frequency and intensity have increased Turkey's vulnerabilities in terms of high inflation, low external liquidity and weak policy credibility​", Fitch said in a statement.

The ratings agency maintained the middle-eastern nation's outlook at "negative".

(Reporting by Aatrayee Chatterjee; Editing by Aditya Soni)

((Aatrayee.Chatterjee@thomsonreuters.com;))

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