Fitch Ratings upgraded Turkey to investment grade on Monday, a move long coveted by Ankara, citing underlying strengths and an easing in near-term risks for the economy. The credit ratings agency highlighted a moderate and declining government debt burden, a sound banking system, favourable medium-term growth prospects and a relatively wealthy and diverse economy.
The upgrade, Turkey's first investment grade rating since 1994, triggered a rally in financial markets. Shares jumped 2 percent to a record high, the benchmark bond yield fell to a near record low and the lira strengthened. There had been growing anticipation of a move by Fitch in recent weeks but analysts had only been expecting an upgrade in the outlook rather than the rating itself. Fitch's decision was likely to boost the Turkish economy, Europe's fastest growing last year but slowing sharply this year, making the country more attractive to foreign investors.
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