Moody's, on Friday, downgraded Turkey's credit rating from "B1" to "B2" (B2) with a future outlook, and said that the country's external weaknesses would likely cause a balance of payments crisis.
And the credit rating agency said in a statement that "with the increasing risks threatening the credit status of Turkey, it appears that the country's institutions do not intend or are unable to effectively deal with these challenges."
Data from the Ministry of Trade showed that the Turkish trade deficit jumped 170% to $ 6.31 billion last August, as unprecedented declines in the value of the lira made citizens rush to buy gold against the backdrop of concerns about the depletion of foreign reserves currencies.
It is noteworthy that Turkish government banks have developed, in cooperation with the Istanbul Gold Foundation (İAR), a gold valuation system that enables Turkish citizens to extract their gold savings from under the pillow to their bank accounts.
On Friday, the Turkish Treasury and Finance Ministry said that keeping these quantities of gold outside the economy increases dependence on external financing, and leads to the state's inability to use its full available potential.
Precautions towards getting off
And Moody's - based in the United States of America - stated that Turkey's reserves have been heading down for years, but they are now at a level that is the lowest in decades, as a percentage of GDP due to the unsuccessful attempts of the central bank to maintain the cohesion of the lira since the beginning of 2020.
Moody's maintained a negative outlook for the country, attributing this to increased levels of geopolitical risks that may accelerate the pace of any crisis, such as its relationship with the United States, the European Union and the tension in the Eastern Mediterranean.
And Anadolu Agency says that Moody's did not update Turkey's credit rating on June 5, the date it had previously announced to update the rating.
On more than one occasion, Turkey has criticized Moody's reports, and its leadership considered that this classification does not match the country's economic indicators, and that it is a conspiracy that is repeated many times.
The Turkish Finance Ministry said earlier that the Turkish debt rate is lower than some countries whose credit Moody's classified as higher than Turkey, and considered that the agency’s rating is "of no value."