Moody’s confirmed the “junk” rating of Russia

Moody’s maintained Russia’s rating at Ba1, which is junk. The forecast – “negative”. The decision not to revise it downward by Moody’s experts explained that the Russian economy has shown resilience in the face of falling oil prices in the beginning of the year correction of budget.

Positively affected by the fact that the annual inflation rate declined to 7.3% in March, compared with 12,9% at the end of last year. In Moody’s assumed that by the end of the year inflation will be roughly at the same level, and by the end of 2017 the price growth may decline to 5% yoy.

The forecast is stored as “negative” because the experts considered the slow introduction of measures that would be answer to slow economic development. In Moody’s indicated that the elections in the next two years put the success of unpopular reforms.

The rating upgrade is possible in case of the Declaration of a clear and justifiable economic programme over the medium term, providing for including the move away from dependency on oil and gas sector.

At the end of February 2015, Moody’s downgraded the sovereign credit rating of Russia to Ba1 with a negative Outlook, this level is considered “junk”. On 5 March, the rating was placed on review for possible reduction.