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The revision of the Outlook to Stable reflects the return to a more conventional and consistent policy mix that reduces near-term macro-financial stability risks and eases balance of payments pressures. There is still political uncertainty regarding the magnitude, longevity and success of the policy adjustment to bring down inflation. Turkiye’s ‘B’ ratings reflect a record of political interference, high inflation, weak external buffers relative to high external financing needs and financial dollarisation. These weaknesses are balanced against low general government debt, a record of external market access and manageable debt repayment profile. Turkiye’s new economic team has re-introduced interest rates as the main monetary policy tool, and seeks to improve policy consistency by containing the increased budget deficit and slowing domestic demand by changing the composition and pace of credit growth. The Central Bank of the Republic of Turkiye has increased its policy rate by 21.5pp to 30% since June. Gross international reserves have recovered noticeably since mid-May and ���������ֳ� forecasts that they will reach USD115 billion by end-2023 and remain fairly stable in 2024. The central bank’s net foreign asset position, though, remains significantly negative (minus USD67 billion) when excluding FX swaps.