Rising risk of further capital controls in Turkey – S&P Global

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Woman holds Turkish lira banknotes in this illustration May 30, 2022. REUTERS/Dado Ruvic/Illustration

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LONDON, June 8 (Reuters) – There is a rising risk that Turkey will introduce additional capital controls if pressures on its currency and financial markets mount further, rating agency S&P Global said on Wednesday.

The Turkish lira has fallen 22% this year, raising concerns that the country could be heading for a repeat of the currency crisis of late last year. Continue reading

One of S&P’s senior government bond analysts, Maxim Rybnikov, said in an online presentation that S&P’s move in April to downgrade Turkey’s local currency rating also reflected concerns about additional capital controls.

“It’s not baseline yet, but I think the risk is increasing,” Rybnikov said.

Another S&P analyst added that the falling lira means that asset quality issues will eventually “emerge” in Turkey’s banking sector, while the pace of tourism recovery has been one of the few positive surprises.

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Reporting by Marc Jones, editing by Rodrigo Campos

Our standards: The Thomson Reuters Trust Principles.

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