The Moody’s positive assessment for the Turkish banking sector

moody's

In its report on Turkish banks, international credit rating agency Moody’s stated that with the normalization of monetary policy, there will be an improvement in banks’ profitability.

It was noted that this step came two days after the Central Bank of the Republic of Turkey (TCMB) raised its policy rate from 8.5% to 15%, reminding that TCMB had been pursuing unorthodox policies that have been reducing the profitability of Turkish banks for a long time. The report mentioned that the recent steps taken by TCMB led to a move towards orthodox monetary policy.

The report also mentioned that the gradual normalization policy will support the profitability of the banking sector. However, it was evaluated that consecutive missteps in the transition to orthodox policy could pose a fundamental risk for banks.

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