Turkey hits out at Moody's after credit rating cut

Turkey on Saturday slammed Moody's decision of downgrading Ankara's sovereign credit rating into "junk" territory.

Moody's downgraded Turkey's credit rating from Ba3 to B1 and maintained a negative outlook late Friday.

The decision was not in accordance with the basic indicators of the Turkish economy, the Ministry of Treasury and Finance said in a statement, adding that many positive developments which show a clear sign of a recovery were ignored.

The move by the credit ratings agency "raises questions about its objectivity and neutrality," it said.

Moody's said the risk of a balance of payments crisis continued to rise, and with it comes the risk of a government default.

"Turkey remains highly vulnerable to a further prolonged period of acute economic and financial volatility. The foreign exchange reserve buffers are weak," the agency said.

The agency remained the negative outlook because of possible instability caused by the re-run of the Istanbul mayoral election on June 23 and the fear of U.S. sanctions against Turkey over Ankara's purchase of a Russian missile defense system.

The Turkish economy entered recession for the first time in a decade last year following a currency crisis.

Source(s): Xinhua News Agency