Standard & Poor’s has raised Turkey’s sovereign debt rating by one notch to “BB+”.
It puts the country on a rating just one step below investment grade meaning it is gradually becoming an attractive investment prospect.
The upgrade is said to be down to improved exports and Ankara’s progress in a peace process with Kurdish militants.
The Turkish lira gained and the cost of borrowing for the government dipped in response.
Turkey’s emerging economy has grown robustly for most of the period since the 2008 financial crisis, in stark contrast with many of its European trading partners, but is at risk from the unrest in neighbouring Syria and elsewhere in the Middle East as well as by its need to import almost all the oil it uses.
It has made steady progress on its credit rating and analysts speculated that the S&P move increased the chances of fellow agency Moody’s, which has been more positive on Turkey, raising it to investment grade.
Fellow agency Fitch has already done that and the country needs a second such rating to join benchmark investment grade bond indexes, allowing many more funds to invest in the country.