ISTANBUL: Turkey's rapidly deteriorating current account deficit is a key risk to the economy and monetary policy alone cannot solve the problem, Moody's Investor Service said, adding the country should show a tighter fiscal stance and boost forex reserves.
In a credit note published on Monday, Moody's said the central bank's unorthodox policy of rate cuts and higher reserve ratios to tackle the deficit had been successful in some ways but domestic credit growth remained stubbornly high and a weaker lira and higher oil prices had shortened the policy's already limited shelf life.
Moody's rates Turkey two notches below investment grade with a positive outlook.
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