LONDON, Feb 5 (A.A) - Fitch has today upgraded Turkey's local currency rating to 'B' from 'B-'. The long term foreign currency rating is affirmed at 'B', while the Outlook is revised to Stable from Negative.
The decision to upgrade Turkey's international local currency rating and assign a Stable Ourtlook reflects the government's adherence to tough fiscal targets and continued structural reform, notably of the banking sector.
Other important factors include the stabilisation of the lira and lower real interest rates, as well as the commitment by the IMF to provide and additional 12 billion U.S. dollars of financial support.
The new IMF money represents a positive development for Turkey. It will ease the Treasury's financing burden this year, and may support futher improvements in market confidence.
Moreover, Fitch estimates that the required domestic debt rollover raio will be around 75 percent this year supporting a decline in domestic debt stock.
Meanwhile, as interst rates have come down, so too have concerns over Turkey's potentially explosive debt dynamics.