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Turkey has tightened and simplified its monetary policy and
introduced macro prudential measures, Deputy Prime Minister
Mehmet Simsek said on Twitter. Work was in progress to further
strengthen the policy mix, tightening fiscal policy via spending
cuts, he added.
The Turkish currency <TRYTOM=D3> has tumbled some 20 percent
this year on deepening concern about President Tayyip Erdogan's
grip on monetary policy after presidential elections this month.
Moody's, which had already downgraded the country's rating in
March, announced on Friday that it would review Turkey's Ba2
rating for a downgrade, citing concern over economic management
and erosion of investor confidence.
"The negative shift in investor sentiment is a significant
challenge for a country that is deeply dependent on net capital
inflows," Moody's said, adding that the authorities were unable
to fully address country's structural economic problems.
Separately, Fitch said it would place 25 Turkish banks' ratings
on watch negative, including listed lenders such as Yapi Kredi
Bank <YKBNK.IS>, Akbank <AKBNK.IS> and Garanti Bankasi <GARAN.IS>.
"The RWNs (Rating Watch Negative) placed on all Turkish banks'
VRs (Viability Rating) reflect risks to their performance, asset
quality, capitalization and, in most cases, liquidity and
funding profiles following a recent period of increased market
volatility," Fitch said in a statement.
The central bank hiked the interest rate by 300 basis points to
16.50 percent in an emergency meeting last week to prop up the
lira, which has hit a record low of 4.9290 against dollar.
(Reporting by Ezgi Erkoyun; Editing by Peter Graff)
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