Moody's upgrades Turkiye's ratings to Ba3, changes outlook to stable
It also upgraded the foreign-currency backed senior unsecured rating of Hazine Mustesarligi Varlik Kiralama A.S. to Ba3 from B1. The entity is a special purpose vehicle wholly owned by the Turkish government from which the treasury issues sukuk certificates (Islamic financial certificates, similar to a bond in Western finance).
Moody's Ratings recently upgraded Turkiye's long-term foreign- and domestic-currency issuer and foreign-currency senior unsecured ratings to Ba3 from B1 and changed the outlook to stable from positive. The upgrade reflects the strengthening track record of effective policymaking. The central bank's foreign currency buffers are relatively weak compared to the gross external financing needs.
'We consider the liabilities of this entity to be an ultimate obligation of the government of Turkiye. The outlook on Hazine Mustesarligi Varlik Kiralama A.S. has also been changed to stable from positive,' Moody's said in a release.
The upgrade reflects the strengthening track record of effective policymaking, more specifically in the central bank's adherence to monetary policy that durably eases inflationary pressures, reduces economic imbalances, and gradually restores local depositor and foreign investor confidence in the Turkish lira, the rating agency noted.
It also reflects the view that the risk of a policy reversal has receded, although it will remain present in the coming years.
The stable outlook balances upside and downside risks to Turkiye's credit profile. On the upside, extending the track record of effective policymaking without political interference has the potential to support the improvement in Turkiye's external position more substantially than Moody's currently assumes.
Furthermore, the government's ongoing and planned structural reforms could improve Turkiye's resilience to external shocks by further reducing its energy import dependence and increasing the competitiveness of exports.
A possible return to policies that would again fuel economic imbalances represents a key downside risk. Given its still relatively weak external position, captured by the central bank's comparatively modest foreign-currency buffers, Turkiye also remains vulnerable to large balance of payments shocks, Moody's observed.
Concurrently, Moody's raised Turkiye's local-currency country ceiling to Baa3 from Ba1. The three-notch gap between the local-currency ceiling and the sovereign issuer rating reflects the improving track record of monetary and macroeconomic policy effectiveness and a relatively limited government footprint in the economy.
These factors are balanced against Turkiye's exposure to elevated political risks and the risk of a reversal in the current policy direction.
In addition, the foreign-currency ceiling has been raised to Ba2 from Ba3.
The two-notch gap between the foreign-currency and local-currency ceilings reflects the central bank's still relatively weak foreign currency buffers compared to the country's gross external financing needs and the latent risk of a return to previous policy settings, in which regulatory measures were used to suppress foreign currency demand.
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Time of India
28 minutes ago
- Time of India
‘Would you rather we switch off our economy,' Indian envoy asks, defending buying oil from Russia
LONDON: Indian high commissioner to the UK Vikram Doraiswami has defended India buying oil from Russia and its close relationship with Moscow, saying to a British journalist: 'Do you want us to switch off our economy?' Doraiswami was speaking to Times Radio when asked by its political editor, Kate McCann, whether he felt comfortable with the 'closeness' of New Delhi's relationship with President Putin. Tired of too many ads? go ad free now 'We have a relationship that is based on a number of metrics — one of these is our long-standing security relationship that goes back to an era in which some of our Western partners wouldn't sell us weapons, but would sell them to countries in our neighbourhood which used them only to attack us,' Doraiswami replied. 'Second, we have an energy relationship today which is the result of everybody else buying energy from sources that we used to earlier buy from, so we have been displaced out of the energy market, largely, and the costs have gone up. We are the third-largest consumer of energy in the world and we import over 80% of our product. What would you have us do? Switch off our economy?' 'Thirdly, we also see around us relationships that other countries maintain for their own convenience with countries that are a source of difficulty for us. Do we ask you to come up with the litmus test of loyalty,' he said. McCann pressed whether India should be accepting Russian oil, pointing out that Nayara's Vadinar refinery in Gujarat had recently been sanctioned by the EU for refining Russian crude. 'We are the fourth-largest refiner of energy in the world and a number of countries in Europe buy refined oil from us, which ought to tell you something, and also many of our European partners are continuing to buy rare earth and other energy products, not oil perhaps, from the same countries that they are refusing to let us buy from. You wouldn't think that seems a little odd,' Doraiswami said. McCann asked whether PM Narendra Modi would be willing to discuss with Putin ending the war in Ukraine. 'Our consistent position, as our PM has repeatedly said, is that this isn't an era of war. He has made that point to the president of Russia and the president of Ukraine. We are very keen for this terrible conflict to stop, as we are keen for conflicts across the world to stop,' Doraiswami said. Tired of too many ads? go ad free now McCann also probed about a 'new pact between India, Russia and China', asking: 'Do you feel comfortable with those relationships, because the leaders of those countries are roundly condemned by others in Europe?' Doraiswami denied there was ever any such pact and said there had just been a 'trilateral meeting format' which had not happened in a long time. 'It was a format in which we had our leadership coordinate across a range of security-related issues,' he said. 'We are neighbours of China, and China is a neighbour of Russia. It is reasonable that we coordinate our security interests,' he said.
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First Post
40 minutes ago
- First Post
How Erdogan's Islamist agenda undermines India-Turkey ties
While India and Turkey have the potential to develop economic and commercial relations, Ankara's political orientations and President Recep Erdogan's Islamic bent of mind and his larger-than-life image of himself prevent the growth of ties read more Turkey, or, to be diplomatically correct, Türkiye (but the country is still popularly known as Turkey), has had close ties with Pakistan since the early 1950s. Their inspiration was Turkey and Pakistan's pro-West orientation during the Cold War. Turkey became a member of NATO in 1952, and both countries joined the US-created Central Treaty Organisation (Cento) in 1955. That led their armed forces, which controlled the destinies of their respective countries, to be drawn to each other. This process was encouraged by the US because it considered them to be bulwarks against the Soviets. STORY CONTINUES BELOW THIS AD Thus, the Cold War cast a shadow on India-Turkey relations because India was a non-aligned country. Thus, also, Turkey's sympathies, through the decades, were with Pakistan on contentious India-Pakistan matters. These included the Jammu and Kashmir issue. Its disposition for Pakistan was not limited to expressions of diplomatic support but covered the defence dimension as well. It was this approach that was decisively demonstrated during Operation Sindoor. Turkish diplomatic statements were biased against India. During the aerial operation, Pakistan extensively used Turkish drones between the nights of May 6-7 and the cessation of hostilities on May 10. It is also believed that Turkey continued its military supplies during the crucial period when Operation Sindoor was actively underway. India was indignant at Turkey openly siding with Pakistan during Operation Sindoor. It signalled its unhappiness by withdrawing the security clearance of the Turkish company Celebi Aviation, which, through its Indian entity, handled cargo at nine Indian airports. This action was appropriate. 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Turkish troops since then are present in the entity, which now calls itself the Turkish Republic of Northern Cyprus (TNRC). Turkey actually wants TNRC to become a sovereign state with full international recognition. A United Nations Peacekeeping Force ensures the maintenance of peace in Cyprus. Before proceeding further to attempt a prognosis of how the India-Turkey-Pakistan ties will evolve, it would be appropriate to consider Turkey's diplomatic responses to the Pahalgam terrorist attack and the beginning and pause of Operation Sindoor. Turkey's Foreign Ministry condemned the Pahalgam attack, calling it 'heinous'. It also stated, 'We are deeply saddened to learn that many people lost their lives and many others were injured in a terrorist attack that targeted civilians in the Pahalgam region of Jammu and Kashmir today (April 22).' 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We condemn such provocative steps as well as attacks targeting civilians and civilian infrastructure. We call on the parties to exercise common sense and refrain from unilateral actions. We expect that measures will be taken to reduce tensions in the region as soon as possible and that the necessary mechanisms, including in the field of counter-terrorism, will be put in place to prevent the recurrence of similar incidents. We also support Pakistan's call for an investigation into the April 22 terrorist attack'. STORY CONTINUES BELOW THIS AD This was clearly a pro-Pakistani statement. It virtually called Operation Sindoor 'provocative' and 'condemned' it. Going further, it supported Pakistan's demand for an 'international' investigation into the Pahalgam attack. Turkey also showed its partisanship by not demanding that a similar international investigation should be carried out on the Jaffar Express attack, which the Pakistani military stated was undertaken by India through the Baloch Liberation Army (BLA). By issuing this statement, Turkey indicated that it fully stood behind Pakistan. This could only cause outrage in the government and people of India, as indeed it did. On the day of the ceasefire—May 10—Turkey again issued a completely pro-Pakistani statement. Its Foreign Ministry noted, 'We welcome the declaration of a ceasefire between Pakistan and India. We call on the parties to make maximum use of the opportunity provided by the ceasefire to establish a direct and healthy dialogue. It is evident that dialogue mechanisms to prevent similar escalations, including in the field of counter-terrorism, need to be established to ensure sustainable stability in South Asia. We extend our appreciation to all countries, in particular the USA, which have contributed to the ceasefire.' STORY CONTINUES BELOW THIS AD In this statement Turkey contradicted or ignored two basic Indian positions. The first was that the cessation of hostilities was because of direct Indian and Pakistani contacts and not caused by the intervention of any third party, including the United States. The second position that Turkey ignored was India's valid stand on talks with Pakistan. These are best summarised in the words 'talks and terrorism cannot go together'. Taken together, Turkey's three statements were so completely against India that they could have no reaction but to bring India-Turkish ties to a new low. They also naturally angered the Indian public, and calls went out that Indian tourists should not visit Turkey; its popularity as a tourist destination for Indians has grown in recent years. 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STORY CONTINUES BELOW THIS AD However, Erdogan, who is an Islamic revivalist, cut the armed forces to size with the help of the Turkish hinterland, which was never in full sympathy with Kemalist ideals. This is unlike Pakistan, where the armed forces are still in control of the country despite the veneer of democracy. What now joins the two countries is that they are both coming more and more in the grip of conservative Islam. At the same time, the professional Turkish army continues its technical linkages with its Pakistani counterpart. In view of these factors, it seems unlikely that Turkey is capable of taking an objective view of developments in the Indian subcontinent or pressing Pakistan to abandon the use of terrorism as a military security doctrine. This can only mean that while India and Turkey have the potential to develop economic and commercial ties, Turkey's political orientations and also Erdogan's Islamic bent of mind and his larger-than-life image of himself will prevent their growth. The possibility of positive growth in India-Turkish ties is therefore bleak. The writer is a former Indian diplomat who served as India's Ambassador to Afghanistan and Myanmar, and as secretary, the Ministry of External Affairs. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect Firstpost's views.
Mint
9 hours ago
- Mint
Apple isn't leaving China. Its footprint is getting harder to see.
Apple's plans to make iPhones in India, components in Vietnam, and build new hubs across Southeast Asia reflect a meaningful effort to diversify away from China. But they tell only part of the story. In March, Apple CEO Tim Cook announced a new $99 million clean energy fund during a visit to Beijing. He didn't disclose project locations or recipients—only that Apple's commitment to China was 'expanding." The announcement came just two months before Chinese regulators delayed Apple's rollout of generative artificial intelligence features, the Financial Times reported. Those developments show how even one of China's most entrenched U.S. companies may face political and commercial friction as it tries to do business in both countries. As geopolitical pressure intensifies and investors look for clarity on decoupling, Apple's recent maneuvers offer a lesson for global businesses: A company need not leave China entirely so long as it can more effectively hide itself within it. Apple's behavior over the past several years shows it recalibrating its exposure to the actors and regions in China that carry reputational or regulatory risk. But it isn't ceasing to do business in China. Rather, Apple has stepped back from some of its direct affiliations and reduced its visibility without severing its ties to the business ecosystem in China, which remains dominated by the Chinese Communist Party. This model is instructive for other multinationals operating in China and other complex authoritarian environments. Confrontation and divestment are costly. Structural opacity, by contrast, offers flexibility—and protection. Apple needs to remain in good standing with regulators on both sides of the Pacific. That has led to unusual arrangements in China's western Xinjiang region. The Chinese Communist Party's policies of mass surveillance and forced labor there have deservedly drawn international condemnation. Congress passed the Uyghur Forced Labor Prevention Act in 2021, banning imports tied to forced labor in Xinjiang. Many Western businesses have withdrawn entirely from doing business in Xinjiang. In 2016, Apple announced that it had taken minority stakes in four wind power projects in China as part of a strategy to decarbonize its supply chain. The projects were developed in collaboration with Goldwind, one of China's largest wind turbine makers. Goldwind has strong ties to state-led infrastructure planning and to Xinjiang. The company was formerly called Xinjiang Goldwind but dropped the word from its name in 2023. Though not sanctioned by the U.S., Goldwind has faced criticism for its ties to Xinjiang from European and U.S. politicians for its suspected ties to forced labor. An investigation by the Tech Transparency Project, a nonprofit organization, and The Information, a tech and business publication, linked Goldwind to state-run labor transfer programs and construction projects involving the Xinjiang Production and Construction Corps, a U.S.-sanctioned paramilitary entity. U.S. pressure over forced labor in Xinjiang intensified in 2020. Companies such as H&M and Nike, which issued statements addressing forced labor allegations, faced backlash on social media in China. By 2021, Apple's affiliated entities no longer appeared as shareholders in the Goldwind wind projects in Xinjiang. Corporate filings, reviewed in a Chinese business registration database, indicate that the equity stakes were transferred to subsidiaries controlled by Goldwind. Apple didn't publicly disclose the move, and no mention appeared in its environmental or investor reporting: Apple's investment shift is being revealed here for the first time. Apple didn't respond to requests for comment. The company has addressed allegations of forced labor involving Xinjiang in at least one other case, saying it regularly audits its supply chain to avoid the practice. It cut ties with a Chinese supplier that had been accused of forced labor in 2021, Bloomberg reported. Apple may have found other investing strategies that allow it to maintain relationships with Chinese entities in less visible ways. In 2018, Apple had announced it and 10 Chinese suppliers would invest $300 million in China Clean Energy Fund. That fund allows Apple's capital to reach state-linked firms and potentially sensitive regions without appearing in public filings. Among the beneficiaries of the fund, disclosed in a Chinese business registration database, is China General Nuclear Power Group, a state-owned firm added to the U.S. Entity List in 2019 for military ties. U.S. companies face sharp restrictions on doing business with companies on the list. The initial clean energy fund, designed to last just four years, ended in 2022. This year, Apple announced a successor fund worth approximately $99 million during Cook's visit to Beijing—but this time disclosed neither project locations nor recipient companies, continuing its reliance on indirect investment vehicles. This isn't a retreat from China but a careful reconfiguration—one that allows Apple to meet its clean-energy goals while addressing government sensitivities in both the U.S. and China. In 2024, Apple ranked third for China exposure of large U.S. companies in Strategy Risks SR 250 rankings; it has since dropped to 27th. Apple continues to operate at scale within China's commercial and political systems, while relying on structures that make its presence less legible to outside observers. The company meets regulatory expectations in both Washington and Beijing, while it avoids direct exposure that could invite retaliation from either. U.S. sanctions law covers physical imports from Xinjiang, but it doesn't restrict capital flows. Financial contributions routed through investment vehicles, such as the CCEF, are legally safe—even if reputational risk persists. Apple isn't exiting China. It has re-engineered its presence there to be less visible and harder for outsiders to trace. Its energy partnerships, once direct and disclosed, are now filtered through funds. In Xi Jinping's China, the companies that endure aren't the ones that speak out. The ones that endure are the ones that adapt—and recede from transparency. Guest commentaries like this one are written by authors outside the Barron's newsroom. They reflect the perspective and opinions of the authors. Submit feedback and commentary pitches to ideas@
