Turkey has received yet another upgrade as Standard and Poor upgraded its credit rating from BB to BB+ yesterday. I say yet another not because of a spectacular amount, but because of a very reasonable amount of times since the international financial crisis began; at a time when most movements by the ratings agencies are downgrades, Turkey has been upgraded several times since the crisis began.
The agency cited progress on the Kurdish issue as prompting its decision. It said that such progress will lead to a decline in security-related spending and would increase border trade in Turkey.
It also added that Turkey was in the process of rebalancing its economy.
"The floating rate policy, the prudential limit on foreign loans and the deepening of the local capital market induce higher resistance to potential capital flows," S&P's statement said.
Turkey's Finance Minister Mehmet Şimşek welcomed the upgrade as "encouraging." "We deserve a higher credit rating," Şimşek said in remarks carried by the private NTV broadcaster, emphasizing that the new rating would make it easier for Turkish companies to access funds. "Even if this evaluation does not reflect the true level that Turkey deserves, it is an important step on the awareness of the gains obtained during our government."
Meanwhile Economy Minister Zafer Çağlayan said he had been expecting such an upgrade. "But it is not enough. This upgrade only does justice to the Turkish economy."