Moody’s Investors Service has upgraded Turkey’s sovereign credit rating from B1 to B3, citing improved confidence in the country’s monetary policy, declining inflation, and a reduction in macroeconomic imbalances.

The agency also revised Turkey’s outlook from positive to stable, reflecting a balance between ongoing policy gains and persistent political and external risks.

The upgrade follows the Central Bank of Turkey’s unexpected decision on Thursday to cut its benchmark interest rate by 300 basis points, bringing it down to 43%. The move marked the resumption of the monetary easing cycle, which had been paused earlier this year amid political turbulence.