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Turkey Downgraded by Moody’s Amid Balance-of-Payments Risk

  • Nation’s rating cut to B3 from B2 on Friday; outlook to stable
  • Moody’s cites inflation, lira devaluation, unorthodox policy
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Turkey’s rating was cut deeper into junk by Moody’s Investors Service as balance-of-payments risks mount and authorities struggle to stabilize the lira and restore foreign-reserve buffers. 

The nation was downgraded to B3 from B2 on Friday by Moody’s, which also changed its outlook to stable from negative. The rating company pointed to odds that Turkey’s current-account deficit will probably exceed earlier expectations by a wide margin, which increases its external financing needs just as global financial conditions tighten.