Turkey faces junk status as Moody's weighs political turmoil

Istanbul

BACK in December, with Turkey teetering on the edge of losing its investment-grade rating, Moody's Investors Service said only political stability and a commitment to a long-overdue economic reform programme could pull the country back from the brink.

Since then, Turkey has suffered the bombing of its airport by Islamic State and seen its parliament attacked by F-16s in an attempted coup. The country is also purging tens of thousands of people from the military, government and academia, all while being in a state of emergency that's given President Recep Tayyip Erdogan the power to rule by decree.

Political stability? Not so much. Yet, as Moody's evaluates Turkey's rating on Friday, it'll have to make a judgement as to whether it's clear that the chaos will hurt growth in the region's largest economy so much that it will hamper it…