Turkey's Credit Rating

SOUSSA: ''THERE IS INCREASE IN DIRECT FOREIGN CAPITAL INFLOW TO TURKEY''

LONDRA/ANKARA (AA) - International rating organization Standard & Poor's (S&P) Turkey analyst Farouk Soussa indicated that there was increase in direct foreign capital inflow to Turkey, adding that if this increase continues, it would be an important factor in upgrading of Turkey's credit rating.
     Soussa told the A.A correspondent that they thought that the referenda held on the European Union (EU) Constitution in European countries would not affect negatively macroeconomic condition in Turkey and the country's EU accession in the long-term.
     He said that Turkey's signing three-year stand-by deal with the International Monetary Fund (IMF) would not affect in the short term the credit rating of the country, since markets expected the deal to be signed.
    
     -RISKS-
    
     Noting that there were some risks in Turkish economy despite a cautious management of public finance and inflation rate, Soussa said that when short-term capital movements were considered, current deficit continued affecting negatively Turkey's credit rating.
    
     -EFFECT OF REFERENDA IN EUROPEAN COUNTRIES TO TURKISH ECONOMY-
    
     In regard to referenda on the European Union (EU) Constitution in European countries and their effect on Turkish economy and the country's EU process, Soussa said that rejection of the EU constitution in referenda could create a short-term turmoil in Turkish markets, adding however it would not create a deep and lasting problem on foreign financing of Turkey.
     In August 2004, S&P raised Turkey's long-term foreign currency rating from ''B+'' to ''BB-'' while it reaffirmed its outlook on Turkey as ''stable''.
     (E֭ULG)
2005-05-30