US-based credit rating agency Standard & Poor's (S&P) upgraded Türkiye's credit rating from B to B+ on economic rebalancing, keeping its outlook positive, Azernews reports, citing Anadolu Agency.

According to a press release from the agency late on Friday, Türkiye is expected to improve coordination between monetary, fiscal, and incomes policy, amid external rebalancing.

"We forecast rising portfolio inflows and narrowing current account deficits over the next two years, alongside declining inflation and dollarization, although progress will be slow and reserve accumulation modest as the central bank limits depreciation of the Turkish lira," the agency said.

It also revised up transfer and convertibility assessment to "BB-" from "B+", saying that the risk of the sovereign preventing private-sector debtors from servicing foreign currency-denominated debt is abating.

"We could raise the rating further should balance-of-payments outcomes continue to improve, inflation decline, and domestic savings in Turkish lira rise, leading to a rebuilding of the government's usable foreign currency reserves," it added.