Fitch Ratings has affirmed Russia's long-term foreign and local currency Issuer Default Ratings (IDR) at 'BBB' with Stable Outlooks, the international rating agency said on Thursday.
The short-term foreign currency rating and the country ceiling were affirmed, at 'F3' and 'BBB+', respectively.
“The affirmation balances Russia's strong sovereign balance sheet, net external creditor position and increasing exchange rate flexibility against its hesitant steps towards greater fiscal consolidation and structural reforms in the face of volatile oil prices and an uncertain global economic backdrop,” the agency said in a statement.
Russia retains a strong sovereign balance sheet relative to the 'BBB' category, the statement said.
“General government debt is low - 11 percent of GDP in 2011 - while the government holds $112bn (7 percent of GDP) in sovereign wealth funds, which provide fiscal financing flexibility and a buffer against a sharp drop in oil prices,” Fitch said.
“Externally, sovereign net foreign assets totaled $467bn at end-2011 (25 percent of GDP), the highest in absolute terms in the 'BBB' category, bolstered by the fifth largest international reserves in the world. Banks, a significant source of external stress in 2008-09, have also become net external creditors,” Fitch said.
