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By Marc Jones
LONDON, Sept 21 The shock to Turkey's economy
from the failed coup in July has largely dissipated, ratings
agency Moody's said on Wednesday, adding it expected to conclude
its rating review of the country within the next month.
Moody's put Turkey's credit rating on review for a possible
downgrade to junk status on July 18, days after the coup
attempt, but for financial markets at least calm has returned.
"It is certainly fair to say that the immediate shock from
the coup has largely dissipated," Alastair Wilson, Moody's
managing director of global sovereign risk, told Reuters.
"But Turkey's challenges remain longer-term, however," he
said, pointing to the country's policymaking drives and the
economy's sensitivities to external factors such as global
interest rate shifts and capital flows.
It is the balance of those challenges against Turkey's
strong government balance sheet and good economic growth that
"The outcome will reflect as much as anything else where we
see the balance between those strengths and weaknesses," Wilson
Both Fitch and Moody's rate Turkey at the lowest investment
grade. That allows its bonds to be bought by conservative funds
that require a country to be classed investment grade by at
least two of the major agencies.
However, if either of the two agencies cut their grades
Turkey's average rating would be junk, since Standard & Poor's
already has Ankara below the investment-grade threshold.
"Where that rating ends up is not going to be driven by high
frequency signals like the exchange rate and short-term capital.
It is what we think it means for the government's willingness
and ability to carry on pushing through change," Wilson added
(Additional writing by Karin Strohecker, editing by Nigel
Stephenson, Larry King)