Fitch Affirms Russia's IDR at 'BBB-' With Negative Outlook

© Sputnik / Vladimir PesnyaFitch rating agency
Fitch rating agency - Sputnik International
Fitch Ratings affirmed Russia's Long-term foreign and local currency Issuer Default Ratings at 'BBB-'.

LONDON/MOSCOW (Sputnik) — Fitch Ratings said Friday it has affirmed Russia's Long-term foreign and local currency Issuer Default Ratings (IDR) at 'BBB-' with a Negative Outlook.

"Fitch forecasts Russia's economy will contract in 2015 by 3.5% after being hit by multiple shocks in 2014…Russia has recovered some competitiveness, but the medium-term growth outlook is the weakest of major emerging markets, at 1%-2%," the agency said in a statement.

Last month, the Bank of Russia projected the country's gross domestic product to fall by 3.2 percent this year, a slight improvement of the Central Bank's earlier 3.5-percent estimate.

"The Outlook is Negative. Consequently, Fitch's sensitivity analysis does not currently anticipate developments with a high likelihood of leading to a positive rating change," the statement said.

In this Wednesday, Nov. 19, 2014 photo, a fracking wastewater storage facility sits just outside the city limits of Reno, Texas - Sputnik International
Germany Unlikely to Be Gas Self-Sufficient if Fracking Ban Lifted – Fitch
Fitch downgraded Russia's measure of credit risk from 'BBB' down a notch at the start of 2015, doing the same for 30 Russian and Russian-owned financial institutions the following week. It cited falling oil prices, rouble depreciation and the effects of a recession on the country's financial sector as reasons behind the negative outlook.

The 'BBB-' rating is one mark above the speculative grade, or "junk" bond category.

Over the course of the year, three major rating agencies in addition to Fitch, including Standard & Poor's (S&P) and Moody's, downgraded Russia's credit rating to junk or near-junk status.

The Russian Finance Ministry argues that the slew of downgrades by western ratings agencies are politically motivated and do not reflect the real market.

To participate in the discussion
log in or register
Заголовок открываемого материала