Sanctions Action: Moody’s has downgraded the rating of Russia – RBC

Sanctions Action: Moody's has downgraded the rating of Russia – RBC

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The government has been actively demonstrate dissatisfaction with foreign rating agencies. “At present, the international financial ratings, gaining an increasingly prominent political overtones, can not serve as an objective basis for decision-making by investors against Russian companies,” – quoted by Interfax Review of Economic Development at the Bank of Russia developed a program of development of the financial market.

New rating action, the government expected from the beginning of last week. Economic Development Minister Alexei Ulyukayev Tuesday named a possible downgrade “either incompetent or biased” as “objective reasons for such a move no».

The reason for the decision to downgrade was nevertheless accepted – deterioration of the medium-term prospects for the Russian economy, analysts explained Moody’s. It is exacerbated by the continuing crisis in the Ukraine and the negative impact of international sanctions. Reduction of GDP in 2014 just will not, but around the end of the year is projected to care indicators in the red zone at least until mid-2015.

Another factor – reduced reserve currency due to capital flight and access problems corporate borrowers to international markets. For the first nine months of this year, the capital outflow from Russia amounted to $ 85.2 billion. Increased demand for the currency led to a decline in international reserves of the country since the end of last year to $ 55.4 billion – to $ 454.2 billion, in spite of the positive balance of payments to $ 52.3 billion in January-September.

In the Ministry of Economic Development does not consider it a big problem. As mentioned earlier Uljukaev, today Russia’s foreign debt – less than 3% of GDP, and the entire national debt – 11% of GDP, one of the lowest in the world. “That is, if you want such a debt can be repaid in one year,” – said the Minister.

Russia’s currency reserves are significant, recognize Moody’s, but the tension makes it necessary to provide liquidity to the private sector. According to the Bank of Russia, Russian banks and companies have to repay $ 134 billion of foreign debt by the end of 2015. Alexei Ulyukayev called realistic estimate of the volume of refinancing of corporate debt of $ 90 billion.

The downgrade will have a short-term negative effect on the market, said an analyst with Bloomberg “Alfa Capital” Andrew Schenck. But investors rather worried that will make S & amp; P, whose rating of Russia at one position instead of two, like Moody’s and Fitch, higher than speculative, said VTB Capital analyst Vladimir Kolychev.

S & amp; P revised the Russian rating downwards in April. Moody’s only in late June changed the outlook “stable” to “negative”, leaving the rating itself unchanged.

Downgrade – rather, it is a statement of fact that the difficulty in borrowing really is, the Agency’s decision not to provide special influence on the situation, says Kolychev. “Russian and foreign manufacturers, whose production in the territory of Russia, from this reduction in rating will not be affected,” – says the director of the Department of Investment Promotion and Innovation Chamber of Commerce Alex Vyalkin.

But in the long term effect of declining confidence in Russia as a borrower can be significant, fears vice president of RSPP, Chairman of the Board of Directors of “Bioenergy” David Yakobashvili: “This will create problems for Russian companies, it will be harder to get loans, go to the IPO, to participate in various projects, negatively impact on the capitalization of Russian companies. ” According to him, the slow pressure of the sanctions, “we feel like sprawling metastases».

Beneficiaries sanctions, Who shall give Russia Photo report Belarusian cheese, Brazilian chicken, potatoes and Chilean Chinese fruit – these products will replace the forbidden food supplies from the EU, USA, Canada, Australia and other countries, to punish Russia with sanctions.
 
 Under Russian retaliatory sanctions hit food supplies for almost $ 8.5 billion – as now banned products were imported to Russia in 2013. Who will benefit from Russia’s “ban on food?”
 
 For Belarus, the Russian sanctions – is Klondike, enjoyed by local officials. Turkey promises to increase exports all of its products in two or even three times, Chile and Argentina will not leave Russia without meat, and Brazil will supply milk.
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