(Bloomberg) -- Fitch Ratings cut Turkey’s sovereign credit rating further into junk, citing factors including the nation’s vulnerability to high inflation.

Fitch lowered Turkey’s score to B+ from BB-, making it four notches below investment grade and on par with Egypt and Bahrain. The outlook for Turkey is negative, the rating company said.

“Turkey’s expansionary policy mix (including deeply negative real rates) could entrench inflation at high levels, increase the exposure of public finances to exchange rate depreciation and inflation, and eventually weigh on domestic confidence and reignite pressures on international reserves,” Fitch said in a statement.

Turkey’s central bank began lowering interest rates under pressure from President Recep Tayyip Erdogan last year, while most emerging markets were doing the opposite to protect their currencies from global price pressures. The monetary authority slashed its policy rate by a total of 500 basis points in four meetings through December, sending risk indicators including CDS to multi-year highs. 

The lira lost as much as half its value against the dollar before the government intervened at the end of December to stem the currency’s decline. Some of the government measures -- including a lira deposit plan that protects savers from swift bouts of depreciation -- introduced a level of stability to the lira but inflation climbed to 48.7% in January, the fastest pace of increases in two decades.

S&P and Moody’s also assess Turkey’s sovereign rating at junk level. 

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