Moody's assessment of the Turkish banking sector

Credit rating agency Moody's shared the view that the return to normalization in monetary policy in Turkey will support the profitability of banks. In its report published on Turkish banks, international credit rating agency Moody's stated that there will be an improvement in the profitability of banks along with the normalization in monetary policy. It was reminded that the CBRT lowered the security facility rate on June 24, and stated, “This step came 2 days after the CBRT raised the policy rate from 8.5 percent to 15 percent. The latest steps of the CBRT, which has been pursuing unorthodox policies that have also reduced the profitability of Turkish banks for a long time, have enabled it to approach orthodox monetary policy.” The report stated that the gradual normalization policy will support the profitability of the banking sector, and evaluated that “however, the wrong steps that can be taken one after another in the return to orthodox policy appear to be the main risk for banks.”