boomslang
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1/26/2015
Russia Downgraded To Junk By S&P
Russia’s credit rating was downgraded to junk by Standard & Poor’s on Monday, making it the first time it has slipped below investment grade in over ten years.
The rating service slashed the country’s credit quality by one notch from BBB- to BB+.
“In our view, the Russian Federation’s monetary policy flexibility has weakened, as have its economic growth prospects,” said S&P.
Russia has struggled with sanctions from the West and a sharply depreciating Ruble, challenges that have contributed to a weakening financial system and limited the Central Bank of Russia’s ability to carry out monetary policy, according to S&P, which has a negative outlook for the country and projects annual growth of 0.5% through 2018. In comparison, Russia has grown at a rate of 2.4% over the past four years.
The severe decline in oil prices has also hit a nation dependent on energy exports. An estimate from the U.S. Energy Information Administration places almost three quarters of Russia’s total export revenue from oil and gas.
Moody's MCO +0.01% and Fitch Ratings, the other two big credit rating agencies, place a Baa3 and BBB- on the country, respectively. These ratings are still in investment-grade territory, but on the brink of being junk.
S&P said it put Russia on its negative watch list in December, as it continued to monitor the struggling economy.
The ruble dropped 5%, trading at 68.01 to the dollar, following the downgrade announcement.
Russia Downgraded To Junk By S&P
Russia’s credit rating was downgraded to junk by Standard & Poor’s on Monday, making it the first time it has slipped below investment grade in over ten years.
The rating service slashed the country’s credit quality by one notch from BBB- to BB+.
“In our view, the Russian Federation’s monetary policy flexibility has weakened, as have its economic growth prospects,” said S&P.
Russia has struggled with sanctions from the West and a sharply depreciating Ruble, challenges that have contributed to a weakening financial system and limited the Central Bank of Russia’s ability to carry out monetary policy, according to S&P, which has a negative outlook for the country and projects annual growth of 0.5% through 2018. In comparison, Russia has grown at a rate of 2.4% over the past four years.
The severe decline in oil prices has also hit a nation dependent on energy exports. An estimate from the U.S. Energy Information Administration places almost three quarters of Russia’s total export revenue from oil and gas.
Moody's MCO +0.01% and Fitch Ratings, the other two big credit rating agencies, place a Baa3 and BBB- on the country, respectively. These ratings are still in investment-grade territory, but on the brink of being junk.
S&P said it put Russia on its negative watch list in December, as it continued to monitor the struggling economy.
The ruble dropped 5%, trading at 68.01 to the dollar, following the downgrade announcement.
. I don't blame them though. Can't do much when there's a billion $ lawsuit on your ***. US government should be condemned for acting like a bunch of goons. S&P clearly states it conveys an "opinion". Everyone has the right to an opinion. If they feel that MBS senior secured tranches have lower default risk than US bonds, then so be it.
