UPDATE 1-S&P raises Turkey rating to BB-plus, near investment grade

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NEW YORK, March 27 (Reuters) - Rating agency Standard & Poor's raised Turkey's sovereign credit rating to BB-plus from BB on Wednesday, just a hair below investment grade, amid a rebalancing economy and progress on Kurdish issues.

"The Turkish economy appears to be slowly rebalancing, without undermining its relatively strong fiscal performance," S&P said in a statement.

The outlook for the rating is stable.

"The upgrade also reflects progress made on resolving Kurdish issues. We expect this to be more lasting than previous efforts: if so, security-related costs would decline and the regional economy, as well as cross-border trade flows, would be boosted," S&P said.

But the statement also noted risks from municipal and presidential elections in 2014 and parliamentary elections in 2015.

Moody's Investors Service rates the country Ba1 with a positive outlook. Fitch rates the country BBB-minus with a stable rating - the lowest rung on the investment grade ladder.

(Reporting by Daniel Bases and Luciana Lopez; Editing by Chizu Nomiyama and Bernadette Baum)

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Keywords: TURKEY RATINGS/SANDP