Update: Turkey’s CDS risk premium hits record low

Turkey’s Risk Score Drops as CDS Premium Continues to Decline

Turkey’s 5-year credit risk premium has seen a significant decrease, with the risk score dropping from 310 basis points to 284.9. This positive development has been welcomed by President Erdogan, who expressed his satisfaction during a recent cabinet meeting.

In his statement, President Erdogan highlighted the successful performance of the OVP and noted that the risk score had decreased from 700 basis points to 200 basis points. He also mentioned that the foreign debt rollover ratios of both the banking and real sector are on the rise. Additionally, Turkey’s gross reserves have seen a substantial increase, from 97.1 billion dollars to 124.1 billion dollars.

Following this news, the stock market reacted positively, with the Borsa Istanbul’s BIST 100 index trading at 10315 points, marking a 0.47 increase. This uptick in the stock market reflects the growing confidence in Turkey’s financial stability.

It is essential to understand the implications of a rise in CDS premium. An increase in the CDS premium signifies a higher perceived credit risk for the company or country in question. Investors may interpret this as a decline in confidence and an increased risk of debt repayment.

Overall, the decreasing risk score and CDS premium bode well for Turkey’s economic outlook. The positive developments in the financial sector are expected to further boost investor confidence and drive economic growth in the country.

 

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