The credit rating agency attributed the upgrade to the country's economic progress, which it largely credited to the Central Bank of Türkiye's tight monetary policy.
The central bank's aggressive interest rate hikes, which began in June 2023, have helped stabilize the Turkish lira, reduce inflation, and rebuild foreign exchange reserves. The government's efforts to de-dollarize the economy have also contributed to the positive outlook.
While S&P acknowledged the progress made, it also noted that challenges remain. The agency expects Türkiye to continue its efforts to reduce inflation, manage wage expectations, and rebalance the economy.
The upgrade is a significant development for Türkiye, as it could attract more foreign investment and boost investor confidence. However, the country still faces economic hurdles, including high debt levels and geopolitical risks. (ILKHA)