Turkish PM hits out at 'biased' Moody's after debt ratings cut

ANKARA — Turkish Prime Minister Binali Yildirim hit out at Moody's on Saturday, claiming it was biased after it cut Turkey's sovereign debt rating to "junk" status.

Amid months of political turmoil, the ratings agency cut Turkey to "Ba1" level, saying the country's finances had weakened while its reaction to the July 15 attempted coup set back expected reforms.

Yildirim dismissed Moody's concerns, insisting the Turkish economy was built on solid foundations and that Ankara would not neglect fiscal discipline.

He pointed out that the central bank did not feel the need to give money to the markets, referring to the fact that there was no mass panic in the markets post-putsch.

"Just two days ago this ratings agency said 'the Turkish economy had easily overcome the shock of the attempted coup'. What changed in two days?" he told reporters in Istanbul.

"Frankly we do not think these assessments are unbiased," he said, suggesting Moody's wanted to create a "perception" of the Turkish economy, but he did not elaborate further.

The ratings agency said on Friday the rule of law was affected by the government's reaction to the failed putsch, dismissing and detaining tens of thousands of people in the education sector, the military and judiciary.

But Yildirim suggested agencies' assessments did not mean that much to Ankara, though his Cabinet stressed that Turkey was still committed to structural reforms.

"The Turkish economy is not an economy that will get into line because of three or five pieces of assessment from agencies," Yildirim said.

He added that as long as Turkey had a young citizenry and major construction projects, "let them say what they want, it is not important to us".

But he admitted to declining tourism, which he hoped would improve in a year's time.

Moody's said a fall in tourism receipts, which represent 4.4 per cent of the economy, due to Russia's sanctions last year and a rise in attacks inside the country, had weakened its balance of payments.

At the same time, it noted, external debt had surged in the government, corporate and banking sector, with some $156 billion in payments due this year.

In a series of posts on Twitter, Deputy Prime Minister Mehmet Simsek in charge of economic affairs, and Economy Minister Nihat Zeybekci said the country was committed to reforms.

Former finance minister Simsek said that research and development reforms were made this year already as well as changes to the labour market, increasing individuals' savings and improving the investment climate.