ISTANBUL, July 12 (Reuters) - Ratings agency Moody’s highlighted concern about the independence of the Turkish central bank on Thursday, saying that further challenges to its effectiveness would be negative for Turkey’s sovereign rating.
In a note to clients, Moody’s said changes to the governance of the central bank suggested its resolve to tighten monetary policy could weaken in the coming months. This week President Tayyip Erdogan appointed his son-in-law Berat Albayrak as treasury and finance minister, hours after being sworn in to a newly strengthened executive presidency.
“It is the further challenges to the effectiveness of the central bank that are most clearly credit negative at this point, given the importance of that institution’s role in addressing the growing imbalances in Turkey’s economy and financial system,” Moody’s said. (Writing by David Dolan; Editing by Daren Butler)