Fitch cuts Turkish credit rating after dismissal of central bank chief

The rating agency Fitch lowered the Turkish sovereign debt rating by one notch on Friday, after a decision made less than a week after the dismissal of President Recep Tayyip Erdogan by the head of the country's central bank.

Fitch spoke of the dismissal of Murat Cetinkaya in his decision to reduce Turkey's long-term debt rating deeper into junk territory, to BB- with a negative outlook.

"The dismissal of the governor of the central bank. . . risks of deteriorating already weak domestic confidence (highlighted by the rise in dollarisation), jeopardizing the inflow of foreign capital needed to meet Turkey's significant external financing needs and worsening economic performance ", said Fitch.

"This initiative adds to the uncertainties about the prospects for structural reforms and the management of public sector finances."

Moody's lowered its credit rating for Turkey in June to B1, which is four notches below the quality of the investment, which is similar to that of Standard & Poor's B +. The note of BB Fitch is three notches in territory trash.

The Turkish lira was about 0.8% lower against the dollar at 5.7,199 after Fitch's downgrade.

Mr. Cetinkaya's dismissal exacerbated investors' concerns that the next governor of Turkey's central bank, Murat Uysal, would be pressured to aggressively lower rates, which could push the country to cope. to the monetary crisis of last summer. Erdogan criticized high interest rates.

Turkey raised its policy rate to 24% in September 2018, an increase of 625 basis points, in response to a sharp fall in the value of the lira.