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Standard & Poor’s downgrades Turkey in an unexpected move

UNITED STATES (OBSERVATORY) –┬áStandard & Poor’s downgraded Turkey’s sovereign debt to a lower rating in the high-risk debt category on Tuesday, citing concerns about inflation prospects amid a lira depreciation.

The rating agency said its decision to reduce Turkey’s rating to “BB- / B” from “BB / B” was not part of its periodic review of Turkey, due to what it described as growing concerns.

“The rating cut is due to our concerns about the deterioration of inflation prospects and the long-term decline in the exchange rate and volatility of the Turkish currency,” the agency said in a statement.

“It is also due to our concerns about the deterioration of Turkey’s external situation and the increasing difficulties in the private sector borrowed from abroad,” she said.