Moody’s Turkey Bank Rating Risk Puts Sovereign on Notice

Scrutiny of Turkey’s credit rating is increasing after Moody’s Investors Service put 10 banks on review for a downgrade, amplifying risks for investors as local elections loom amid a government corruption probe.

Turkey’s five-year credit default swaps more than doubled since May 17, the day after Moody’s raised the sovereign to investment grade. The promotion helped push borrowing costs for the country’s banks down, with the yield on the September 2022 dollar security of Turkiye Garanti Bankasi AS, the nation’s largest, at 6.1 percent yesterday, compared with 6.3 percent for debt at Russia’s biggest lender OAO Sberbank.