Turkish markets hit by Moody’s rating downgrade
LONDON — Turkish financial markets took a battering Monday after ratings agency Moody’s downgraded the country’s credit grade to junk status to account for a series of shocks to the economy that included bombings and an attempted coup.
The Istanbul 100 stock index fell 3.8 per cent and the national currency, the lira, also took a hit. The dollar was up 0.4 per cent at 2.9796 lira.
The sell-off is largely due to Moody’s statement late Friday that it was cutting Turkey’s government debt rating to Ba1 from Baa3. The downgrade means Moody’s joins Standard & Poor’s in rating Turkey below investment grade. That’s important because it will likely cost the government more to borrow on capital markets and prompt some investment funds to sell Turkish assets.
Turkey’s economy has wilted this year in the face of a string of extremist attacks and uncertainty following the failed coup on July 15 against President Recep Tayyip Erdogan that saw more than 270 people killed.