Fitch Ratings affirmed Türkiye's credit rating as"B" and raised the rating outlook from "negative" to "stable" after 2 years.
The outlook was revised to stable "reflecting a return to a more conventional and consistent policy mix that reduces short-term macro-financial stability risks and alleviates balance of payments pressures".
Stating that the Central Bank of the Republic of Türkiye will increase the policy rate to 35% by the end of 2023 and will remain at this level in 2024, Fitch pointed out that there are high uncertainties about the future pace and duration of monetary policy tightening.
In the Fitch Ratings statement, it was noted that economic growth is expected to reach 4.3 percent in 2023 and 3 percent in 2024.
After the elections, Türkiye moved swiftly to improve relations with NATO allies, signaled its intention to revive the negotiations with the European Union (EU) to update the Customs Union, and continued to rebuild relations with countries in the region, the statement said.
The statement emphasized that Türkiye continues to play an active diplomatic role in the war in Ukraine by negotiating the expansion of the grain corridor.
In the statement, it was reported that the continuous narrowing of the current account deficit, the increase in capital inflows, improvements in the level and composition of international reserves, and the decrease in external vulnerabilities due to the decline in dollarisation could lead to a possible rating upgrade.
In July last year, Fitch downgraded Türkiye's credit rating from B+ to B and confirmed its outlook as "negative".