Standard & Poor's Global Ratings on Wednesday downgraded ratings on the Republic of Turkey, and said the attempted coup at the weekend has further eroded the country's institutional checks and balances. "In addition, we expect a period of heightened unpredictability that could constrain capital inflows into Turkey's externally leveraged economy," the agency said in a statement. S&P lowered Turkey's foreign currency rating to BB from BB-plus, pushing it further into speculative, or "junk" status. It said the outlook is negative, meaning it could lower the rating again in the medium term. "The negative outlook reflects our view that Turkey's economic, fiscal, and debt metrics could deteriorate beyond what we expect, if political uncertainty contributed to further weakening in the investment environment, potentially intensifying balance-of-payment pressures," said the statement. On Monday, Moody's Investors Service placed Turkey on review for a possible downgrade as it assesses the fallout from the coup. The iShares MSCI Turkey ETF was down 2% Wednesday, while Turkcell , the only Turkish company to be listed on a U.S. exchange, was down 1%.
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