President Recep Tayyip Erdoğan has accused rating agencies Moody’s Investors Service and Fitch Ratings of political motives in their assessments of the Turkish economy, warning Ankara could “cut its ties” with them, local media reported on Sept. 16.
Both Moody’s and Fitch have in recent weeks warned of the potential impact of continued political uncertainty following former prime minister Erdoğan’s victory on Aug. 10 in the country’s first direct presidential election.
Local media quoted Erdoğan as telling reporters on his plane back from a visit to Qatar late on Sept. 15 that such statements were “politically motivated” rather than based on assessments of the economy.
“We stopped our cooperation with Standard Poor’s and if they continue on this path, I can tell the prime minister to stop cooperation with these two also. We haven’t reached that point yet,” the Hurriyet daily quoted Erdoğan as saying.
Standard Poor’s said last year it had failed to reach a deal to offer a full rating for Turkey and would only issue “unsolicited” assessments – meaning it is not paid by Turkey to provide coverage but does so anyway to meet investor needs.
The country responded angrily in May 2012 when SP cut the outlook on its sovereign credit rating to stable from positive. Erdoğan warned at the time that Ankara may no longer “recognise” the agency, calling its decision “ideological”.
Fitch, which rates Turkey BBB- with a stable outlook, said last Thursday that the central bank may face growing political pressure to cut interest rates despite rising inflation in the run-up to a general election next June.
Moody’s, which has a Baa3 rating on Turkey with a negative outlook, warned last month that Erdoğan’s victory in the presidential election did not resolve the country’s credit challenges and that uncertainty would persist.