Washington / Anadolu

Fitch Ratings has affirmed Turkey's credit rating at 'BB-' with a stable outlook.

The agency said in a statement on Friday evening that it confirmed Turkey's long-term sovereign credit rating at 'BB-', maintaining a 'stable' outlook.

It explained that low public debt, the large size and diversity of the Turkish economy, higher per capita income compared to the average of 'BB' rated countries, Turkey's ability to maintain access to external financing during stress periods, and the resilience of the banking sector are among the key factors supporting the rating.

It noted that Turkey's potential growth rate is close to 4%, forecasting growth of 2.8% this year and 4.4% next year.

The agency also forecast a decline in Turkey's inflation rate from 32% in June to 29.5% by the end of 2026.

It added that the Turkish central bank's 300-basis-point hike in the funding rate and tightening of credit conditions helped support a partial recovery in international reserves following foreign exchange market interventions to stabilize the lira during the initial phase of the escalation between the US and Iran.

Fitch expects Turkey's total foreign exchange reserves to reach $167 billion by the end of 2026.

The agency stated that continued decline in external financing needs, strengthening of external reserves, and maintaining a tight monetary policy that supports lower inflation could pave the way for an upgrade of Turkey's credit rating in the future.

Fitch had upgraded Turkey's credit rating in September 2024 from 'B+' to 'BB-', with a stable outlook.