S&P: No capital spikes in Turkey

US Federal Reserve\'s (Fed) expected decision to rein in its economic stimulus program would result in a slowing of capital flow into Turkey, Standard & Poor\'s Chief Turkey Analyst Eileen Zhang said on Tuesday. \"There is uncertainty regarding global liquidity conditions due to Fed\'s plan to reduce its bond buying,\" Zhang said. \"We estimate that Fed will roll out its plan progressively. Therefore, we don\'t expect steep rises in capital in Turkey.” Anticipation runs high in markets globally as Fed is scheduled to announce on Wednesday its plan to moderate its long-running economic stimulus program, regarded as one the most important economic events of the year. \"Our main forecast is that capital flow into Turkey would slow down but current deficit would continue to be financed through external means, and a partial drop in total exchange reserves may be observed,\" Zhang said. Zhange noted that Turkey\'s material assistance to the Syrian refugees it hosts in camps would not have a direct detrimental effect on Turkey\'s S&P credit rating, which stands at BB+, one notch below investment grade, following an upgrade in March this year. Fed\'s earlier announcement in May of a potential decrease in its bond buying had shaken the international financial landscape, especially in developing countries, contributing to a gradual fall of nearly 20% in Turkey\'s stock exchange over the next three months.