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Since President Tayyip Erdogan won re-election in May,
authorities have abandoned the unorthodox low interest rate
policy in favour of a sharp policy tightening.
The ratings agency said the policy pivot now improves the
prospects for bringing down the country's currently very high
inflation rates to more sustainable levels, the agency said.
"While headline inflation is likely to rise further in the near
term, there are signs that inflation dynamics are starting to
turn, indicative of monetary policy regaining credibility and
effectiveness," Moody's said.
Turkey's annual inflation rate climbed to 64.77% in December,
sustaining an upward trend that is expected to continue in
coming months after a big rise in the minimum wage.
The agency maintained Turkey's ratings at "B3".
(Reporting by Vedant Vinayak Vichare in Bengaluru; Jonathan
Spicer in Turkey; Editing by Shailesh Kuber)
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