Turkish President Recep Tayyip Erdogan has pledged to deal with rating agency Moody’s following the parliamentary election after the company’s analysts placed Turkey on review for a downgrade.
“God willing, we will conduct an operation against Moody’s after June 24,” Erdogan told the Ankara-based Anadolu Agency. “Moody’s is making unnecessary statements despite the fact that we are not a member of it. What a shame.”
According to the Turkish president, the US rating agency was pointedly putting Turkey in a difficult situation. The comments come two weeks on from Moody’s putting Turkey on review for a downgrade just months after it cut the country’s credit rating. On June 1, the rating agency said that a lack of clarity about Turkish economic policy had put at risk the country’s Ba2 ratings.
The decision was reportedly taken amid “expectation that the recent erosion in investor confidence in Turkey will continue if not addressed through credible policy actions following the June elections.” The agency also said that “the credibility of Turkey’s policy institutions has been undermined by the ineffectiveness of monetary policy, in part reflecting political interference in the policymaking process.”
Last month, the Turkish lira hit a record low of 4.92 against the US dollar, forcing the country’s central bank to raise rates to tackle a potential currency crisis. Despite that, Turkey managed to raise 4 billion dollars through a bond sale earlier this year, according to the country’s treasury. However, investors are alarmed by the upcoming elections and Erdogan’s promise to take tighter control of monetary policy.
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