Turkey President Tayyip Erdogan Warns Fitch and Moody’s

Tayyip Erdogan the Turkish President has accused Fitch ratings and Moody’s Investors Service, the rating agencies, of political motives for their assessments of the economy in Turkey. Erdogan warned that Ankara could cut ties with the two, local media announced on Tuesday.

Both Fitch and Moody’ have recently warned of the possible impact of continued uncertainty politically following the victory of Erdogan August 10 in the first direct election for the President in the country.

Erdogan was quoted by local media as telling reporters while on his plane returning from a trip on Monday to Qatar that such statements by the agencies were politically motivated instead of being based upon the actual assessments of the Turkish economy.

The Turkish president said the country stopped cooperating with Standard & Poor’s. Therefore, if the two continues go down the same path, I can tell our prime minister not to cooperate with them either.

However, Erdogan said that point had still not been reached as of yet.

Last year Standard & Poor’s announced it failed to reach an agreement to offer a complete rating for Turkey.

The rating agency said it would only be issuing unsolicited assessments, which means it does not get paid by Turkey to give coverage, but does anyway, to meet the needs of investors.

In May of 2012, Turkey responded angrily when S&P lowered its outlook on the sovereign credit rating from positive to stable.

At that time, Erdogan said that the government in Ankara might not recognize the agency any longer, calling the decision ideological.

Fitch, which gives Turkey a BBB- rating with an outlook that is stable, said last week that the Turkish central bank might face increased inflation in the run up to, next June’s general elections.

Moody’s, which currently has a rating of Baa3 on Turkey with an outlook of negative, warned in August that the victory by Erdogan in the recent presidential election had not resolved the credit challenges facing the country and that there would be uncertainty that would persist.

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