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Moody’s upgrades outlook on Russia’s sovereign rating to positive from stable

The debt rating agency praised Russia’s ‘rules-based framework’ and growing macroeconomic stability

(TASS) – Moody’s rating agency has changed the outlook on Russia’s Ba1 long-term issuer and senior unsecured debt ratings to positive from stable. Concurrently, Moody’s affirmed Russia’s long-term ratings at ‘Ba1’, the agency said in a press release.

“Growing evidence of institutional strength” and “increased evidence of economic and fiscal resiliency” were the key factors of the change in the outlook, the agency said.

“Russia’s macroeconomic framework coped well with the oil price shock and with the impact of sanctions imposed to date, and enhancements have been made to the government’s rule-based fiscal framework,” the press release said.

In Moody’s view, the rating “appropriately balances Russia’s fiscal strength, somewhat improved economic prospects and effective policy-making against the combination of longer-term economic challenges and continued nearer-term exposure to external events.”

In a related decision, Moody’s raised Russia’s country ceilings for foreign currency debt to ‘Baa3/P-3’ from ‘Ba1/ NP’ “to reflect diminished concerns that the government might impose capital controls or otherwise ration foreign exchange reserves.” The rating agency also raised the country risk ceilings for local currency-denominated debt and deposits to ‘Baa2’ from ‘Baa3’, while the country ceilings for foreign currency deposits remain at ‘Ba2/NP’.

“Russia’s medium-term macroeconomic perspective is also better than forecast a year ago when Moody’s changed the rating outlook to stable from negative,” the agency said.

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