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Fitch Follows JP Morgan, Upgrades Turkish Currency on Stronger than Average Growth Forecasts

Posted on 05 December 2009

Yet another internationally respected financial outfit has bet on Turkey’s economy to recover faster from the downturn that the rest of the developing world.

Yesterday saw Fitch upgrade Turkey’s long-term foreign currency rating by two notches to BB+ from BB-. The outlook on the ratings is stable.

"The upgrade reflects Turkey’s relative resilience to the severe stress test of the global financial crisis and some easing in prior acute constraints related to inflation, external finances and political risk," in Fitch sovereigns team’s head of Emerging Europe, Edward Parker said  in a statement.

While the global shock caused a deep recession in Turkey, it has not triggered a balance of payments or financial crisis, the report said.

Though Turkish GDP is expected to contract 6% in 2009, Fitch expects growth of 4% next year. In recent trading, the Turkish lira rose 1.4% against the U.S. dollar.

The news also sent the lira on a rally against the British pound, recovering from a new low of 1.00GBP/2.52TYR to 2.45 since the report rating change was announced.

The news came a day after major global investment group JP Morgan Chase and Co upgraded Turkish stocks from neutral to overweight because it also forecasts a stronger than average recovery in the Turkish economy next year.

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