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No grounds for rating agencies to downgrade Russia’s credit quality — presidential aide

December 25, 2014, 15:16 UTC+3 MOSCOW
The motives of rating levels with regard to Russia “are rather far-fetched and are exclusively of presumable nature,” presidential aide Andrey Belousov said
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© Vladimir Smirnov/TASS

MOSCOW, December 25. /TASS/. There are no grounds for international rating agencies to revise down Russia’s investment-grade rating, presidential aide and former Economy Minister Andrey Belousov said on Thursday.

“However, these ratings will not cause any additional problems for the economy,” he said. “They (ratings) created additional complexities some time ago but we have already got over it,” the presidential aide said.

“That is why, we expect this (possible rating downgrade) will not cause any considerable effects,” he said, adding “there are no grounds for a rating revision so far.”

The motives of rating levels with regard to Russia “are rather far-fetched and are exclusively of presumable nature,” the presidential aide said.

Also, Russia’s possible downgrade below the investment rating to BB+ could be expected only from S&P while its ratings assigned by Fitch and Moody’s still have two notches above the non-investment grade, he said. So, “at best, we’ll stay somewhere in between the investment and non-investment rating.”

If Russia’s ratings are revised, it would be better for the country, if it is done in the coming days than in mid-January, he said.

S&P announced on December 23 it had placed Russia’s sovereign rating on a negative credit watch due to the ruble’s high volatility and the weakening economy.

S&P currently rates Russia’s long-term foreign currency obligations at BBB- and national currency obligations at BBB.

Meanwhile, Moody’s recently downgraded the foreign currency rating of Russian energy giant Gazprom and its supported entities to Baa2 from Baa1 with a negative outlook. In addition, the agency placed on review for downgrade the ratings of more than 60 Russian companies, including Tatneft oil company and Nizhnekamskneftekhim petrochemical company. The agency said it had placed the ratings on review for possible downgrade due to the continued deterioration of the operational environment and the situation on the Russian financial market.

Fitch plans to review Russia’s ratings in January 2015. Nevertheless, Fitch believes that Russia's sovereign and external balance sheets support its 'BBB'/Negative rating, and public finances continue to benefit from ruble depreciation, with the federal government running a budget surplus.

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