Fitch cuts Turkey's debt ratings to 'B' from 'B+'

Referring to the move, Fitch said "policies are becoming increasingly interventionist as well as unpredictable"

Ratings agency Fitch downgraded Turkey's debt rating to "B" from "B+" on Friday, citing increasing inflation and broad concerns about the economy, from a widening current account deficit to interventionist policies, Qazet.az reports.

The economic fallout from Russia's invasion of Ukraine has also stoked prices in import-dependent Turkey, especially due to rising energy and commodity costs.

Fitch forecast annual inflation to average 71.4% this year, the highest among sovereigns rated by the agency, adding that its trajectory remains highly uncertain. Average inflation is set to slow to 57% in 2023, Fitch said, due to overly accommodative policies until parliamentary and presidential elections scheduled for no later than June 2023.

The lira lost 44% of its value against the dollar last year, mainly due to a series of rate cuts from the central bank, sought by President Tayyip Erdogan. The currency is down a further 23% so far this year.

The government has taken steps to stem the lira's decline. A recent move by the BDDK banking watchdog to restrict lira lending to foreign currency-rich companies helped it rally briefly last week as corporates sold hard currencies.