May 16, 2019 / 1:05 PM / 7 days ago

Turkey needs credible plan to avoid downgrade - Moody's

LONDON, May 16 (Reuters) - Turkey needs to put a comprehensive and credible economic plan in place if it is to avoid another cut to sovereign credit rating, a senior Moody’s sovereign analyst said on Thursday.

New analysis from the rating agency shows Turkey’s recession, the slump in the lira, upcoming refinancing pressures and dwindling reserves have pushed it to right near the top of its worldwide external vulnerability index.

“Failure to put forward a credible broad-based plan to address the structural issues, and in the near-term dampen the market volatility pressure on the lira...that would be a pressure point from a rating perspective,” Moody’s Managing Director of Sovereign Risk, Yves Lemay, told Reuters.

Moody’s downgraded Turkey to Ba3 - three rungs into junk territory - last August, but it also kept it on a ‘negative’ outlook which is a warning that another cut could happen in 12-18 months.

Reporting by Marc Jones; Editing by Angus MacSwan

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