S&P: THE FUNDING PROCESS HAS NOT SPREAD TO THE FINANCIAL SYSTEM
Answering the questions of AA correspondent, Vartapetov described the regulations and policy response put forward by the authorities within the scope of the fund investigation as "quick and convincing".
"They managed to contain it and there was no negative impact on the financial system more broadly," Vartapetov said. he said.
Vartapetov stated that there is not much evidence showing that the process has negatively affected the trust and perception of the Turkish economy, and that limited development has been observed so far in terms of macroeconomic effects.
Noting that there is no significant reaction in the areas they follow, such as exchange rate, dollarization, finance and banking sector liquidity, Vartapetov said that there may be question marks regarding the quality of governance, the rule of law and the effectiveness of policy making.
Vartapetov said, "Therefore, if the development regarding funds remains isolated, I do not think it will create downward pressure in terms of credit rating. I think the negative effects will be limited if the fund crisis remains isolated and households continue to have confidence in assets denominated in real currency." he said.
Reminding that the credit score is determined by the committee decision, Vartapetov said that developments regarding the funds will definitely be discussed at the evaluation meeting. Stating that the process could be highlighted as a risk, Vartapetov noted that they have not yet seen any clear evidence that significant macroeconomic effects will occur.
He added that he did not expect the fund process to have a "game-changing" impact in terms of investor sentiment if it was limited to a narrow asset class.
GROWTH AND INFLATION EXPECTATION
Vartapetov also shared his predictions regarding the growth and inflation outlook of the Turkish economy. Accordingly, S&P expects average inflation in Türkiye to be around 30 percent this year and economic growth to be close to 3 percent.
Emphasizing that international reserves are one of the most important parameters in terms of credit score, Vartapetov stated that Türkiye started the year with record-level reserves.
Vartapetov stated that the Central Bank used some of its reserves in order to control the negative effects of the increase in energy prices, and then replaced some of them, and stated that gross reserves remained slightly below January-February levels.
Vartapetov said, "Therefore, the reserves are slightly below the January-February levels in terms of gross level, but the recovery in reserves supports the credit rating." made his assessment.
Stating that net reserves have also recovered, Vartapetov said that the attitude of households towards lira and lira-denominated assets is one of the issues closely monitored in terms of credit score.
Noting that households' attitudes towards the lira remained strong despite the geopolitical developments in the Middle East, high energy prices and the funds-related process, Vartapetov stated that they did not see any obvious signs of dollarization rising again or increasing dollarization in the financial system.
