Fitch leaves Turkey's rating unchanged, but cuts outlook to negative from stable

Fitch ratings agency left Turkey’s sovereign credit rating unchanged at BBB on Friday but cut its outlook to negative from stable as it continues to assess the fallout from the unsuccessful coup attempt in July.

Change to outlook from Fitch follows a week after Moody’s decided to delay its ratings decision for the country. Standard & Poor’s last month moved to downgrade Turkey’s rating. The agency noted that external vulnerabilities are large but long-standing and financing has been resilient in the aftermath of the coup attempt.

Turkish Deputy Prime Minister Mehmet Simsek today said rating agency Fitch's decision to keep Turkey credit rating at BBB- was "phenomenal" in the aftermath of July's coup attempt. Simsek said downward risks on growth have increased following the coup attempt. He added he believed there would be revisions to the medium-term programme in the end of September or early October.

Turkey’s current account deficit has continued to narrow due to the lagged impact of lower oil prices on the import bill, despite the drop in tourism revenues, and Fitch forecasts it to bottom at 4.3 percent of GDP in 2016, before rising to close to 6 percent of GDP by 2018.