Investors are dumping Turkish assets at a record pace

Investors in Turkish assets apparently voted with their feet last month - after dumping a record amount of stocks and bonds in 2015 - in part following an electoral victory by president Recep Tayyip Erdogan, some analysts said.

Year-to-date investors had pulled out $7.6bn in assets, including $1.4bn in November alone, as a result of the war in Syria and following Russian sanctions against the country in retaliation for the downing of one of its military jets, Bloomberg reported.

Concern was also growing among analysts that the new government would use its new found popularity to meddle in the central bank's policy decisions, so as to favour interest rate cuts, the newswire reported citing analysts at Capital Economics.

Nevertheless, on 4 December ratings agency Moody's reaffirmed its rating on the long-term sovereign debt of the government in Ankara.

Analysts at Moody's pointed out how the country's debt had in fact fallen by 10 percentage points to stand at just 33.5% of gross domestic product in 2014.

On top of that, foreign currency denominated debt accounts for a low share of the country's stock of debt, the agency said.

"[...] and the debt structure is favourable showing relative resilience to Turkish Lira weakness and forthcoming global interest rate increases," Moody's added.

However, Moody's also kept its negative outlook on the Baa3 debt rating because, "Turkey faces a challenging combination of slowing growth and diminishing external confidence that only more political stability and a broad economic reform programme could improve.

"The ongoing negative outlook reflects the risk associated with delays to the economic programme."

As of 15:31 the US dollar was 0.67% higher versus the Turkish lira and changing hands at 2.9123.