US risk rating agency Duff & Phelps announced an initial rating of BB for the republic’s foreign currency obligations on 26 June. Bankers say the rating, which is just below investment grade, is a promising sign for future assessments, but comes from a relatively minor agency.

Assessments are more keenly awaited from the leading US ratings agencies Standard & Poor’s (S&P) and Moody’s Investor Service. But these agencies are not expected to raise the country’s risk rating above the sub-investment level, official sources say.

An assessment team from S&P visited Turkey in the second half of June, and a Moody’s team is due to arrive on 27 June. A visit from Japan Credit Rating (JCR) is also scheduled in early July.

Turkish risk was relegated to the present levels of B+ by S&P and Ba3 by Moody’s in early 1994, which contributed to a loss of financial confidence in the country. The government has since looked for alternative ratings from Duff & Phelps and London-based IBCA.

Istanbul reports says S&P were concerned during their visit with the slow progress in structural reform, notably the privatisation programme, which will ensure economic stabilisation.