Moody's Turkey view now positive, ups lira debt

Moody's Investors Service said it changed the outlook on all of Turkey's ratings to positive from stable in light of the country's considerable economic progress since 2001 and the prospects for a significant deepening of economic, financial, and even political integration with the European Union.

At the same time, Moody's has upgraded the ratings on the government's Turkish lira-denominated instruments to B1 from B2 in recognition of improved domestic debt sustainability.

The positive outlook affects the B1 foreign-currency country ceiling for debt, the B2 foreign-currency country ceiling for bank deposits, and the B1-rated bonds and notes issued by the Republic of Turkey, regardless of currency denomination.

Moody's said that while the rating agency acknowledged that a heavy debt burden and a wide current account deficit remained sources of vulnerability for Turkey, Moody's said its positive outlook reflects both the way the economy has performed - rapid disinflation, robust investment, increased productivity - and the way it is managed - political stability and responsibility in macroeconomic management.

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