Fitch revises Türkiye's rating outlook to positive, affirms BB-

In a significant assessment of economic progress, Fitch Ratings has upgraded its outlook on Türkiye's long-term foreign-currency issuer default rating to Positive from Stable, affirming the rating at "BB-".

Key Drivers: Reserves and Reduced Vulnerabilities

The international credit rating agency announced the decision on Friday, attributing it to "a further reduction in external vulnerabilities." Fitch highlighted a faster-than-anticipated accumulation of gross foreign exchange reserves, which reached $205 billion in mid-January, up from $155 billion at the end of 2024. Crucially, net reserves excluding swaps recovered to a positive $78 billion from a deficit of $66 billion in March 2024. The agency also noted improved reserve quality and a decline in foreign-currency contingent liabilities.

Supportive Policies and External Financing

Fitch pointed to continued tight macroeconomic policies as a supportive factor for the improved metrics. The country's external financing position is also strengthening, with external liquidity projected to rise to nearly 100% by 2027 from 80% at the end of 2024. This projection is supported by Türkiye's sustained access to external financing and a resilient banking sector, according to the agency.

Underlying Strengths and Future Path

The ratings affirmation at BB- continues to be supported by Türkiye's large, diversified economy and its low level of government debt. The Positive outlook indicates that if current trends in reducing macroeconomic imbalances and building buffers continue, an upgrade to the sovereign credit rating could follow in the future.