Fitch Ratings convenes panel discussion to assess Türkiye's economic outlook and policy implications

Following the credit rating agency's decision to raise Türkiye's credit rating, Fitch Ratings arranged an online panel on Wednesday to talk about the latest economic developments in the nation. The purpose of the panel was to investigate how this upgrading may affect Turkish banks, non-bank financial institutions, companies, and foreign public finance.

Türkiye Analyst at Fitch Ratings and Senior Director Erich Arispe Morales underlined Türkiye's persistent resolve in its economic policies at the panel. In order to substantially lower inflation in the future, Morales emphasized the significance of monitoring how regulations would be strengthened going forward.

He mentioned the continuous decline in the current account deficit and the Turkish economy's diminishing vulnerabilities. As a result of the current account deficit and the subsequent recovery in foreign reserves, Morales also highlighted the significance of decreases in imports of gold and energy.

Inflation, according to Morales, is currently Türkiye's biggest policy concern. In support of his claims that the government is committed to maintaining economic stability, he pointed to recent policy measures such as the Central Bank of the Republic of Türkiye's (CBRT) surprise increase in the policy rate and the ratification of the economic program thereafter.

In order to handle inflation sustainably, Morales emphasized the importance of determining how much policy will need to be tightened going forward.

Reverting to traditional economic strategies and tightening monetary policy have advantages, according to Lindsey Liddell, Head of Emerging Markets EMEA Bank Ratings at Fitch. The macroprudential laws' simplicity, which has lessened the strain on banks, was another point made by Liddell. Liddell warned that some dangers still exist for the industry even if he has noticed a noticeable increase in Turkish banks' recent issuances.

Source: AA