Reconsider whether S&P’s “junk rating” of Russia?
On Friday, February 23, the international rating Agency S&P and Fitch are going to revise Russia’s credit rating. S&P keeps Russia’s sovereign rating one notch below investment grade. However, there are economic and political reasons to believe that Russia will return in the investment category. With a high probability of a similar move this year, make and Moody’s.
Recall that the ratings of Russia was reduced in 2014, amid falling oil prices, the Crimean history and the conflict in Eastern Ukraine, which resulted in the introduction of anti-Russian sanctions. Following the increase in sovereign rating will be upgraded the ratings of Russian companies and commercial banks. To traded on the exchanges companies this is by far the pole, as many conservative funds can only buy stocks of companies the investment category.
However, even after the return of Russia’s sovereign rating in the investment category it will be low relative to other countries with comparable macroeconomic and debt indicators for political reasons. The American Agency was never very fond of Russia. Political discount has taken place even in the zero years, when there was no geopolitical confrontation between Russia and the USA Vladimir Putin and George Bush had a full understanding on all major issues.
The return of Russia’s rating in the investment category is primarily the merit of the Ministry of Finance and the Central Bank of the Russian Federation. The ratio of sovereign debt to GDP in Russia is one of the best in the world. Russia’s international reserves are now about $450 billion, the Bank of Russia targets inflation, not the exchange rate, it is not strictly necessary in the case of a crisis situation to spend its reserves. Of course, his role in raising the sovereign rating of Russia was played by the American Ministry of Finance. The Americans decided not to impose sanctions on the sovereign debt of the Russian Federation, thinking that they can strike at the functioning of global markets.
The Director of analytical Department,