| 9.1°C Dublin

Turkey's Erdogan warns Moody's and Fitch of political motives in assessments - report

Close

Turkey's Prime Minister Tayyip Erdogan and wife Ermine wave hands to supporters as they celebrate his election victory in front of the party headquarters in Ankara. Reuters

Turkey's Prime Minister Tayyip Erdogan and wife Ermine wave hands to supporters as they celebrate his election victory in front of the party headquarters in Ankara. Reuters

REUTERS

Turkey's Prime Minister Tayyip Erdogan and wife Ermine wave hands to supporters as they celebrate his election victory in front of the party headquarters in Ankara. Reuters

Turkish President Tayyip Erdogan has accused rating agencies Moody's Investors Service and Fitch Ratings of political motives in their assessments of the Turkish economy, and warned Ankara could cut its ties with them, local media reported on Tuesday.

Both Moody's and Fitch have in recent weeks warned of the potential impact of continued political uncertainty following former prime minister Erdogan's victory on Aug. 10 in the country's first direct presidential election.

Local media quoted Erdogan as telling reporters on his plane back from a visit to Qatar late on Monday that such statements were politically motivated rather than based on assessments of the economy.

"We stopped our cooperation with Standard & Poor's and if they continue on this path, I can tell the prime minister to stop cooperation with these two also," the Hurriyet daily quoted Erdogan as saying, although he added:

"We haven't reached that point yet."

Standard & Poor's said last year it had failed to reach a deal to offer a full rating for Turkey and would only issue "unsolicited" assessments - meaning it is not paid by Turkey to provide coverage but does so anyway to meet investor needs.

The country responded angrily in May 2012 when S&P cut the outlook on its sovereign credit rating to stable from positive. Erdogan warned at the time that Ankara may no longer "recognise" the agency, calling its decision "ideological".

Fitch, which rates Turkey BBB- with a stable outlook, said last Thursday that the central bank may face growing political pressure to cut interest rates despite rising inflation in the run-up to a general election next June.

Moody's, which has a Baa3 rating on Turkey with a negative outlook, warned last month that Erdogan's victory in the presidential election did not resolve the country's credit challenges and that uncertainty would persist.

Online Editors