According to a report published by rating agency S&P Global on Monday, stricter global financing conditions are exerting pressure on the banking institutions of developing markets, with Turkey and Tunisia being particularly susceptible.
So long as the government manages the balance of payment concerns, S&P believes that Turkish banks will continue to have access to external financing, albeit with a slight decline in rollover rates.
S&P analysts noted in a report that Turkish banks are especially susceptible to “negative market sentiment,” “increased risk aversion,” “reductions in global liquidity,” and “higher financing costs.”
The nation’s banks remain extremely susceptible to the unwinding of economic imbalances accumulated in prior years, such as the bursting of the real estate market speculation and the tightening of monetary policy in response to hyperinflation.
Additionally, the agency noted that a feeble lira has a negative influence on the creditworthiness of Turkish enterprises.
