TODAYSZAMAN.COM – Turkey economy minister: We don’t care about Moody’s rating

Turkey economy minister: We don’t care about Moody’s ratingTurkish Economy Minister Nihat Zeybeki has said his country andquotdoesnand#39t careandquot about comments of credit rating agency Moodyand#39s, claiming that they were unwillingly forced to revise Turkeyand#39s economic forecast.Moodyand#39s warned on Friday that the Turkeyand#39s outlook was likely to remain unstable until at least the middle of next yearTurkeyand#39s president-elect Recep Tayyip ErdoIanand#39s victory in Sundayand#39s vote did not resolve the countryand#39s credit challenges, Moodyand#39s said, and the political landscape would remain uncertain until at least the conclusion of parliamentary elections, due by June 2015.

Turkish markets initially took ErdoIanand#39s win as a sign of continuity, firming early on Monday, but have since traded less optimistically.andquotUntil the political landscape reaches some stability, the countryand#39s structural reform agenda is likely to suffer, leaving Turkey exposed to potential shifts in international market sentiment,andquot Alpona Banerji, vice president and senior analyst at Moodyand#39s, said in a note.

The ratings agency said the credit implications of the election would not be clear until a new prime minister is appointed in late August and a parliamentary election held.ErdoIan expects to announce his new prime minister as early as next week following a meeting of his ruling Justice and Development Partyand#39s (AK Party) senior leadership, he told reporters late on Thursday.

ErdoIan, who remains prime minister until he is inaugurated on Aug. 28, wants a staunch loyalist as his replacement who can hold the AK Party together and win a stronger parliamentary majority in the election.

That would boost his chances of pushing through the constitutional change needed to introduce the presidential system he has long coveted for Turkey.Moodyand#39s also forecast Turkeyand#39s economy would grow by 3 percent this year, down from 4 percent in 2013, and raised concern about the independence of monetary policy.

andquotA series of rate cuts to the one-week repo rate between January and July and one cut to the overnight borrowing rate increase inflation risks in Turkey and are likely to fuel questions about the central bankand#39s independence,andquot it said.ErdoIan, wedded to the idea that high interest rates cause inflation, has repeatedly called for the central bank to make sharper interest rate cuts.

Known to be a loyalist to ErdoIan, the economy minister said on Saturday that Turkeyand#39s economy will further improve with the new president and accused the Moodyand#39s of having different agenda andquotWe know where you are working for,andquot Zeybeki said about the credit rating agency. He said the Moodyand#39s is disturbed that Turkish people will pay less interest and that Turkey will be less dependented on andquotcertain circles.

andquotThe minister said none of the nine warnings of Moodyand#39s about Turkey is correst and said Ankara doesnand#39t care about its assessments.

SOURCE: Today’s Zaman