Timothy Ash weighs in on Moody’s decision: More could come

International credit rating agency Moody’s raised Turkey’s credit rating by two notches from “B3” to “B1”, while maintaining the credit rating outlook as “positive”.

Moody’s said in a statement that the main driver of the upgrade to B1 was improvements in governance, particularly the decisive and increasingly well-established return to orthodox monetary policy.

Timothy Ash, Senior Emerging Markets Strategist at Bluebay Asset Management, also noted that two-notch rating increases are rare.

“It shows there is more to come.”

Stating that this decision reveals how far Moody’s is behind Standard & Poor’s (S&P) and Fitch Ratings in Turkey’s credit rating and that it needs to catch up with them, Ash said that Treasury and Finance Minister Mehmet Şimşek’s reforms have shown their impact.

“The two-stage upgrade of Turkey’s credit rating and the positive outlook show that more is to come,” Ash said.

Moody’s also raised Turkey’s credit rating outlook from “stable” to “positive” in January.

Another credit rating agency, S&P, raised Turkey’s credit rating from “B” to “B+” in May, while maintaining the credit rating outlook as “positive”.

Fitch Ratings raised Turkey’s credit rating from “B” to “B+” in March, while changing the outlook from “stable” to “positive”.