Fitch raises rating of Russia on the brink of “junk” – BBC Russian

Fitch raises rating of Russia on the brink of "junk" – BBC Russian

• January 10, 2015

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Rating agency Fitch downgraded Russia from “BBB” to “BBB-”, which is the lowest investment grade.

At the agency’s decision to decline affected oil prices and the depreciation of the ruble.

The rating agency also notes the continued negative impact of Western sanctions, because of which the Russian banks and state corporations do not have access to external capital markets.

The downgrade has at least one notch will mean a transition zone in the non-investment, or so-called “junk” level.

Friendly negative outlook

Financial experts believe that due to the economic crisis in Russia in the near future may receive “junk” rating from all three major international rating agencies.

Russia’s rating from Standard & amp; Poor’s and “BBB-”, Moody’s still retains a higher rating – “Baa2″, which is two notches above “junk” rating.

However, the rating outlook of Russia in all three agencies is negative, which could mean its downward revision at any time.

According to the forecast Fitch, the budget deficit in Russia in 2015 will amount to 3.7% of GDP. Inflation at the end of 2015 could reach 8,5%.

The Agency believes that economic growth in Russia may resume only in 2017.

S & amp; P expects mid-January

In late December, the agency Standard & amp; Poor’s raised the rating of Russian government bonds on review for possible downgrade.

Currently, government securities of Russia in the ranking of S & amp; P refer to the average level of reliability (BBB-), but take a lower place in this category.

The downgrade to “junk” will cause a decrease in demand of investors in Russian securities and the cost of borrowing in foreign markets for the country to grow.

S & amp; P explained the need for the revision of the sovereign Russian rating deterioration of the situation in the country’s economy. The decision will be announced in mid-January.