(ANSAmed) – ISTANBUL, JANUARY 10 - Fitch Ratings issued a
second statement about Turkey in three days, saying a further
prolonged decline in the currency would put pressure on Turkish
companies’ ratings, as daily Hurriyet online reports. “Turkish
corporates are historically and structurally vulnerable to FX
volatility, in part due to currency mismatches between debt,
cash flow and under-hedged positions on foreign-currency debt,”
the statement release by the agency said. The Turkish Lira has
been under intense pressure since the U.S. Federal Reserve
announced it will begin winding down, or tapering, its USD 85
billion-a-month money-printing program and Turkey’s high-level
corruption probe has added to that pressure. The lira dropped
approximately 15% against the dollar and 20% against the euro
over 2013, the agency calculated. Despite the lira’s fall, it
will have a limited impact on credit metrics, when it will be
combined with the potential for other domestic shocks from the
country’s political crisis, it constitutes risks to ratings in
the coming year. “As most rated Turkish corporates are raw
material importers, especially of energy and intermediate goods,
margin pressure from rising costs is likely to be seen across
the market. The impact of a prolonged decline will be worse for
companies with little or no foreign currency revenues to offset
rising costs,” the ratings agency noted. (ANSAmed).
