Moody's Raises Turkey's Rating to Investment Grade

Moody's has raised Turkey's bond rating to investment grade, the rating agency said Thursday, citing improved economic and public finance measures and progress on reforms.

The government-bond ratings went up a notch to Baa3, the first step into investment grade, from Ba1, with outlook considered stable.

Turkey was granted higher ratings by Standard and Poor's in March and last November by Fitch.

Praising Turkey's improved "economic and fiscal metrics", the rating agency noted: "Since the beginning of 2009, Turkey's debt burden has fallen by 10 percentage points to a manageable 36 percent of GDP, and Moody's expects this decline to continue in the coming years."

Secondly, the agency cited "progress... on a wide-ranging institutional reform program that Moody's believes will gradually erode the country's external vulnerabilities."

These include increasing investment in personal pensions, a new commercial code and moves to reduce energy dependence.

Moody's said it expects Turkey's ability to finance its debt to strengthen as the proportion that is denominated in foreign currency drops, noting a decline in the measure from 46.3 percent in 2003 to 27.4 percent in 2012.