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Downgrading of Russia’s rating ignores advantages of Russian economy - finance minister

He noted that his ministry saw “no grounds to dramatize the situation.”

MOSCOW, January 26. /TASS/. S&P’s downgrading Russia’s rating to a junk status demonstrates exorbitant pessimism and ignores strong points of the Russian economy, Russian Finance Minister Anton Siluanov said on Monday.

On Monday, the international rating agency Standard&Poor's downgraded Russia to speculative grade “BB +” from “BBB-“ with a negative outlook. Last time Russia was rated that low was eleven years ago, in January 2004, when S&P downgraded Russia to “BB+.”

“This decision demonstrates the agency’s exorbitant pessimism. It ignores a range of factors that characterize strong points of the Russian economy,” he told journalists, adding that such strong pints included vast international reserves, such as sovereign funds, current account surplus and low public debts. “These are undoubted advantages of Russia in the current macroeconomic conditions,” he stressed.

He noted that his ministry saw “no grounds to dramatize the situation.”

“There are no grounds for foreign investors’ withdrawing from Russia assets, since such actions can be justified by the loss of investment rating from at least two agencies,” he said, adding that there were no grounds either to expect creditors demand early repayment of debts by Russian borrowers. This risk, in his words, is overestimated.

“The rating agency’s decision is unlikely to have additional adverse impacts on the capital market, since risks of downgrading Russia’s credit ratings have already been taken into account by market players in quotations of Russia assets,” he said.