Poll Shows S&P Will Keep Turkey's Credit Rating at BB- With Stable Outlook

Sixteen analysts predict S&P will keep Turkey's sovereign rating at BB- and the outlook stable ahead of the Oct. 16 review, which respondents said would curb near-term lira pressure.

Market reaction was pending.

S&P review on Oct. 16

A poll of 16 market analysts conducted this week reported full consensus that S&P will not change the rating or outlook on Oct. 16. Respondents framed a hold as the baseline scenario for the coming announcement.

Analysts in the poll said a maintained BB- and stable outlook would help limit immediate selling pressure on the lira, keep foreign-currency funding costs steadier and restrain local bond spread widening. They added that a downgrade would have the opposite effect, widening spreads and weakening the currency, while an upgrade would ease financing conditions.

Traders and portfolio managers will be focused on the Oct. 16 decision and intraday moves in the lira and local-currency sovereign spreads; respondents said those metrics would be the primary channels through which the rating action would affect markets.

Watch Oct. 16 for S&P's announcement and same-day moves in the lira and Turkey sovereign spreads.