Turkish President Recep Tayyip Erdogan has once again lashed out at credit rating agencies, this time directing his ire at Moody’s, which he has vowed to take action against following the June 24 elections, claiming that it is undermining his country’s economy.
The Turkish strongman, a self-proclaimed “enemy of interest rates,” attributes the weakness of his country’s lira currency to the misdeeds of Western powers bent on undermining his government. He insists that the sell-off is the work of a nefarious “interest-rate lobby” that has links to Moody’s, Standard & Poor’s and Fitch, which have been critical of Turkey’s economy.
Seventeen Turkish banks were last week downgraded by Moody’s and placed on review for further downgrading
Indeed, all three firms rate the country’s debt as “junk”, or non-investment grade, and have drawn attention to the poor economic picture that is emerging amid Erdogan’s increasingly authoritarian rule and his efforts to lower interest rates.
“God willing, after June 24 we will mount an operation on that Moody’s,” Erdogan told the private broadcaster 24 TV on Wednesday.
“They make unusual statements even though we are not a member of Moody’s… You’re a firm in such an important position and you take steps saying ‘How do I stain Turkey? How do I put them in a tough position?’ They will not succeed.”
Seventeen Turkish banks were last week downgraded by Moody’s and placed on review for further downgrading, a move that reflected the firm’s opinion that “the operating environment in Turkey has deteriorated, with negative implications for the institutions’ funding profiles.”
The lira has plunged 18% so far this year, reaching a series of record lows and forcing the central bank to raise rates in an effort to halt the sell-off.