Breaking….S&P downgrades Turkey’s outlook.

Just in from S&P:

Standard & Poor’s Ratings Services today revised the outlook on Turkey’s long-term foreign and local currency sovereign credit ratings to stable, from positive. At the same time, we affirmed our ‘BB/B’ foreign currency and ‘BBB-/A-3’ local currency long- and short-term sovereign credit ratings on Turkey. We also affirmed the Turkey long- and short-term national scale ratings at ‘trAA+/trA-1’. The ‘3’ recovery rating and ‘BBB–’ transfer and convertibility (T&C) assessment remain unchanged.

Less-buoyant external demand and worsening terms of trade (the price of exports compared to imports) have, in our view, made economic rebalancing more difficult, and have increased the risks to Turkey’s creditworthiness given its high external debt and the state budget’s reliance on indirect tax revenues. We have revised the outlook on Turkey’s long-term sovereign credit ratings to stable from positive, reflecting our view that the ratings are likely to remain at the current level during the next 12 months.’

Ah yes, that’ll be those Erdaganomics again, then. You read it here first.

16 thoughts on “Breaking….S&P downgrades Turkey’s outlook.

  1. Is Turkey more of a basket case than Spain or not? My view is that Spain is in a worse position than Turkey yet S&P give Spain at least a 3 notch better rating than Spain with the same outlook on long term debt.
    Egan Jones rates Spain at BB+ which is more realistic.


  2. That’s strange I must be behind the times. The stories that I usually read about Turkey read something on the order of it being a financial beacon for the Islamic world.


  3. It might be explained by much of the Islamic world seeing lying and ripping off Western infidels as being a good thing and worthy of praise from Allah. S&P are just another Western infidel and can be ignored.


  4. I don’t understand why anyone would give a damn what these ratings agencies say about anything considering how wrong they were with their so called ratings leading up to the 2008 crash. They should have been looked in to for criminal actions, or, at the very least, be dead in the water for any serious rating competency!


  5. That’s the Theme everywhere now… Even Murdoch tried it?

    There will never again be truth in Politics or Banking


  6. @WFD: Ratings agencies = analytical insurance for investment fund managers. They don’t always get it right but they’e still a lot better than nothing. The problem is that they come under pressure, not least from EU elites who dislike their sovereign ratings and like all fascists, want to control them. Which means the ratings wouldn’t be worth the paper they’re printed on.


  7. BT, thanks for the reply.
    Didn’t they get it very wrong though, bordering on purposely deceptive.


  8. @WFD: Yes they did with the US subprime. That was almost certainly due to pressure and/or corruption from someone, and there should have been criminal investigations. But perhaps the pressure originally came from the US govt under Clinton…


  9. Standard & Poor’s ratings agency took negative actions on 16 Spanish banks—downgrading 11 of them—

    Here are the big changes:

    Santander: A+ to A-
    Banesto: A+ to A-
    Santander Consumer Finance: A to BBB+
    BBVA: A to BBB+
    Banco Sabadell: BBB- to BB+
    Ibercaja Banco: BBB to BBB-
    Kutxabank: BBB to BBB+
    Banca Civica: BBB- to BB+
    Bankinter: BBB to BBB-
    Confederación Española de Cajas de Ahorros (CECA): BBB to BBB-
    BBSA: A to BBB+
    La Caixa: BBB- (placed on creditwatch negative)
    CaixaBank: BBB+ (placed on creditwatch negative)
    Bankia: BBB- (placed on creditwatch negative)
    Banco Financiero y de Ahorros S.A. (BFA): BB- (placed on creditwatch negative)
    Banco Popular Espanol: BBB- (to remain on creditwatch negative)



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