At the beginning of August, Fitch raised Russia's long-term sovereign rating for foreign and national currencies one notch to BBB, and in September Moody's raised its rating to Baa3.
Russia's ratings will remain at investment grade as long as the budget deficit remains low, fiscal policy becomes freer, gold and foreign currencies grow, and the country continues its foreign debt repayments, Jonathan Schiffer, a senior Moody's analyst for Russia, said at an international trade and investment conference in London Wednesday.
Fitch analyst for Russia Sharon Raj said Russia's BBB rating was for the long-term. It may be raised if Russia takes more measures to create financial safeguards in the country, and if financial figures improve. However, a substantial delay in reforms, weak growth, or damage to the economy or political system could cause a drop in the rating, although this is unlikely, she said.
The two analysts said that the upgrades were not only due to the positive economic situation caused by high oil prices, but also to several other macroeconomic factors. Among these, Schiffer cited the dynamic development of non-oil related sectors of the economy, well-balanced budget policy, and the establishment of the Stabilization Fund.
Schiffer said that that if Russia kept its budget expenditure under control, it would be able to cope with a sharp drop in oil prices for at least three years. He cited political stability, economic diversification, and state regulation of the economy as the most important factors for Russia's future credit status.
