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Moody's cuts Turkey's credit rating further

An oversized copy of a 200 Turkish lira banknote featuring a photo of modern Turkey's founder Mustafa Kemal Ataturk decorates a currency exchange shop in Istanbul, on Aug. 17, 2018. (AP Photo/Lefteris Pitarakis)

ANKARA, Turkey (AP) -- Ratings agency Moody's has downgraded Turkey's credit rating deeper into "junk" status and slapped a "negative" rating on its outlook.

It's the latest blow to the country whose currency, the lira, has taken a battering amid concerns about fundamental economic problems and a diplomatic and trade dispute with the United States.

Moody's stripped Turkey of its investment-grade rating in 2016 and Friday's move lowered it one rung further. The agency says the downgrade was triggered by what it described as a further weakening of Turkey's public institutions and a related reduction in the predictability of Turkish policy making.

Debt rating downgrades typically mean higher borrowing costs as investors demand steeper interest rates to take on riskier debt.

Moody's says its negative outlook reflects its expectation that there's more financial stress likely on the horizon for Turkey.

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