Credit rating agency Fitch upgraded Türkiye's Long-Term Foreign-Currency Issuer Default Rating (IDR) to BB- from B+ on Friday.

Fitch said the upgrade reflects key rating drivers and their relative weights, including improved external buffers, reduced contingent FX liabilities, as well as the expectation of a consistent policy mix, lower, but still elevated inflation, lower current account deficits and more.

Inflation in Türkiye is expected to finish the year at 43%, resulting in average inflation of 59.5% for 2024, according to Fitch.

The agency forecast inflation to average 31% next year and 21% by the end of 2025.

"Given the still high projected level of inflation, the premature easing of monetary policy or the abandonment of the current policy direction, which is not our base case, could reignite inflationary pressures and consequently macro-financial stability and balance of payments risks," it said in a statement.

Fitch raised Türkiye's rating to "B+" from "B" early in March and revised its outlook to positive from stable saying the move "reflects increased confidence in the durability and effectiveness" of policies implemented since the pivot after last year's May elections, including greater-than-expected frontloading of monetary policy, in reducing macroeconomic and external vulnerabilities.