Standard & Poor’s to Review Russia’s Sovereign Debt Rating

© Photo : WikipediaStandard & Poor's Headquarters in Lower Manhattan, New York City, New York
Standard & Poor's Headquarters in Lower Manhattan, New York City, New York - Sputnik International
Standard & Poor's announced it could downgrade Russia's sovereign debt status.

WASHINGTON, December 24 (Sputnik) – Credit rating agency Standard & Poor's (S&P) has announced it could downgrade Russia's sovereign debt status as it gave the country a negative outlook citing monetary weakness and economy.

"We are reviewing our assessment of Russia's monetary flexibility and the impact of the weakening economy on its financial system," S&P said in a statement Tuesday.

"As a result, we are placing our long-term sovereign credit ratings on Russia on CreditWatch with negative implications," the statement added.

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S&P has a current BBB- credit rating for Russia. A downgrade, which the rating agency said was 50 percent possible, could possibly cause Russia to lose its sovereign debt status.

Earlier this month, Russia's Central Bank said the Russian economy could contract by up to 4.5 percent next year if the price of oil, which has dropped nearly 50 percent, remains at $60 per barrel.

The Russian national currency has contracted by more than half of its value to dollar since July due to the falling global oil prices and Western economic sanctions, prompting the head of the country's Central Bank to predict a 10-percent inflation rate in 2014, as well as in the first quarter of 2015.

In December, the Central Bank hiked interest rates first to 10.5 percent from 9.5, and just a while later to 11.5 percentage points in an effort to stabilize the rouble.

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