No need to cut Turkey's rating thanks to fiscal measures

By Nuran Erkul

ANKARA (AA) - Moody's will not need to downgrade Turkey's credit rating in its upcoming rating appraisal on Friday thanks to measures taken by the Turkish economy administration after the coup bid on July 15, the general manager of Turk Eximbank said on Tuesday.

Moody’s rating agency had announced that it would review Turkey’s rating for a possible downgrade following the July 15 attempted coup, which the Turkish government says was organized by the Fetullah Terrorist Organization.

Soon after the coup plot, Standard & Poor's (S&P) decided to cut Turkey’s rating even though Turkey has not requested a rating by S&P since 2012.

"Turkish economy administration and Turkish Central Bank took a number of measures. When the reflections of these measures begin to be seen, there will be no reason to downgrade Turkey's credit rating because the Turkish economy is in a better situation compared to April, 2014," Hayrettin Kaplan, general manager of Turk Eximbank told Anadolu Agency.

The country’s top economic officials have been trying to reassure investors that the failed coup attempt on July 15 will not cause permanent damage to the economy. Consequently, Turkey’s Central Bank acted on July 17 to cut commissions on daily liquidity options for banks to zero and to provide unlimited liquidity to maintain financial markets following the coup bid.

Additionally, the Central Bank said it would raise if necessary the daily foreign exchange auction threshold currently set at $50 million. Other measures include the Turkish government forming a sovereign wealth fund to create a safer investor environment.

Furthermore, top officials of the economy administration have started to gather both in meetings and teleconference interviews with foreign investors to explain Turkey's actual position.

In April 2014, Moody's rated Turkey "Baa3" with a negative outlook - a rating which has remained unchanged so far.

Kaplan described S&P's decision for Turkey as "hasty" while he said that Moody's acted calmly by announcing that it would observe the situation in Turkey rather than directly cutting the rate.

He noted that Turkey's current account deficit has reduced, and the country has become one of the fastest growing economies in the region.

"It will be understood that neither the coup attempt nor the state of emergency decision will have an impact on the markets and Turkey's economy," Kaplan emphasized.

The Turkish government announced a three month state of emergency after the coup plot.

- Full support for Turkish exporters

Kaplan stated that there will be more good news on Turkish exports in the following days.

"Steadily rising exports to the European Union and the normalizing of relations with Russia will contribute to Turkish exports in the near future. We at Turk Eximbank support our exporters and work coordinately with the Economy Ministry to solve any problems that our exporters may face after the July 15 coup bid," he explained.

Kaplan concluded that with the support of Turk Eximbank, Turkish exporters are given new opportunities to increase their exposure to new markets.

Turk Eximbank is a fully state-owned bank acting as the Turkish government’s major export incentive instrument in Turkey’s export strategy. As Turkey’s official export credit agency, Turk Eximbank has been mandated to support foreign trade and Turkish contractors and investors operating overseas.