Reports

6/25/2024

Fitch Updates the Outlook for Turkish Banks

International credit rating agency Fitch Ratings updated the outlook of the Turkish banking sector to "improving".

Fitch announced that it updated its assessment of the Turkish banking sector, which was previously "neutral", to "improving".

The institution cited the decrease in external financing pressures and macro and financial stability risks following the adoption of more traditional macroeconomic policies following last year's presidential elections as the reason for the decision.

The published report said: "Increased investor confidence in Turkey's policy framework led to an improvement in the foreign exchange reserves position of the Central Bank of the Republic of Turkey (CBRT), lower dollarization and increased access of banks to external financing. As a result, the foreign exchange swaps made by banks with the CBRT, which constitute a significant part of the sector's foreign currency (FX) liquid assets, have decreased significantly. All these factors are expected to continue to support financial stability."