Moody’s cuts Turkey’s sovereign rating, but raises outlook to stable

Ratings agency Moody’s on Friday lowered Turkey’s sovereign credit rating by one notch to “B3” from “B2”, citing rising balance of payment pressures and risks of further declines in the country’s foreign-currency reserves.

“(The) current account deficit will likely exceed earlier expectations by a wide margin, raising external financing needs at a time of tightening financial conditions globally,” the agency said in a statement.

Moody’s, however, raised its outlook on the country to stable from negative, reflecting a view that the risks at the B3 level are balanced.

Last week, the Turkish central bank’s net international reserves rose around $2.7 billion to $11.81 billion in the week to Aug. 5, rising to their highest level since late May, Reuters reported, citing data from the central bank showed on Thursday.