Moody’s lowers rating of Russia – Equality and Reconciliation

The credit rating agency Moody’s downgraded a notch Friday, “ Baa3 “, the debt rating of Russia whose finances are particularly sealed by the recent fall in world oil prices.

“ The significant drop in oil prices and the impact of the exchange rate will undermine further the growth prospects of the country already dark , “Moody’s wrote in a statement. The note of the Russian debt is no longer only a notch in the category of obligations “junk” considered particularly risky for investors.

According to Moody’s, the credit worthiness of Russia, already tested by the Ukrainian crisis, suffering from the plummeting world crude oil prices, whose country is a major exporter, and capital flight which reduced its currency. The ruble has lost about 16% since the beginning of the year against the dollar, after falling 41% in 2014 caused in particular by the economic sanctions imposed on Moscow for his alleged role in the crisis in Ukraine.

The decrease of budget revenues of the country, “ erosion ” of its foreign exchange reserves will weaken “ the financial strength ” of Russia, which is close to the economic recession, ensures the rating agency. According to government estimates, the Russian economy could well suffer a contraction of 4% of its gross domestic product and the budget deficit to 3% in 2015.

In this context, Moody’s states have already begun a new Review of Russian finances which could lead to a new downgrade of the country if the economic and geopolitical situation were to get worse. “ A downgrade of one notch would be the most plausible even if a more serious outcome can not be ruled out in such a volatile environment “, warns the agency.