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- October 13, 202618°
- BIST10012,151-0.94%
- USD49.220.00%
- EUR55.21+0.28%
- GOLD4,191.80+0.03%
- INTEREST37.00%-1.00
- BITCOIN81,430-0.40%
- October 13, 202618°
Türkiye fund liquidations are not expected to pressure its credit rating
An assessment conducted in London concluded that the liquidation of some investment funds in Türkiye is not expected to put pressure on the country’s credit rating. On September 17, the Capital Markets Board decided to liquidate 131 funds affiliated with seven portfolio management companies.
Karen Vartapetov, an analyst at an international credit rating agency, and Regina Arginio, its director for financial institutions, said the liquidation process involving some investment funds in Türkiye is not expected to put pressure on the country’s credit rating.
On September 17, Türkiye’s Capital Markets Board decided to liquidate 131 funds affiliated with seven portfolio management companies in order to protect investors and increase transparency. The decision followed the detection of unusual movements in the prices of shares linked to some of the funds.
Officials’ assessment
Vartapetov described the response of Turkish authorities during the investigation into the funds as swift and convincing. She said the process had been brought under control and had not had a negative impact on the broader financial system.
Vartapetov also said the process would not put pressure on the credit rating if it remained an isolated incident. She added that evidence pointing to a negative impact from the fund liquidations on confidence in and perceptions of the Turkish economy was limited.
Arginio said the developments involving the funds had their greatest impact on the stock market and led to declines in share valuations. Stressing the importance of keeping the process limited to the funds concerned, Arginio described the response of the policies implemented so far as strong.
Arginio said that, alongside judicial proceedings, liquidity had been provided to the market and the banks that would carry out the liquidation of the funds had been identified.
Türkiye’s credit rating outlook
The agency is expected to publish its second credit rating and outlook assessment for Türkiye this year on October 16. In its most recent assessment, conducted in April, Türkiye’s credit rating was affirmed at “BB-/B” and its outlook was maintained as “stable”.
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