Turkish markets hit by Moody's rating downgrade

LONDON – Turkey's stock markets and currency have fallen sharply after the country's credit rating was downgraded into junk status by Moody's.

The Istanbul 100 stock index is down 3.9 percent at 76,610 points Monday while the Turkish lira has also taken a hit. The dollar is up 0.7 percent at 2.9874 lira.

The selling is largely due to Moody's statement after the market close on Friday that it was cutting its rating on Turkish debt to Ba1 from Baa3. That pushes Turkey's rating below investment grade, meaning it will likely cost the government more to borrow on capital markets.

Moody's voiced a number of concerns, including the country's "sizeable external funding requirements" and the growth outlook.

Turkey's economy has recently faced a series of shocks, including an attempted coup in July.