Fitch's Affirms Russia's Rating, Maintains Negative Outlook

By Josh Beckerman 

        Fitch Ratings affirmed its investment-grade rating for Russia, while maintaining its negative outlook for the nation.
        Downgrades from Standard & Poor's Ratings Services and Moody's Investors Service earlier this year placed Russia's ratings in junk territory. On Friday, Fitch maintained the triple-B-minus rating, on the brink of junk status. That rating has been in place since a one-notch downgrade in January.
        Fitch forecasts Russia's economy will contract by 3.5% this year, compared with a January expectation of a 4% contraction.
        "Alongside ever-present oil price risks, a worsening in geopolitical tensions remains the biggest risk" to the stabilization of Russia's economy, Fitch said.
        Low oil prices, the conflict involving Russian-backed separatists in Ukraine and the weakened ruble are among the factors that ratings firms have cited in their downgrades.
        In a report last month, the Bank of Russia said sufficient reserves and flexible monetary policy ensure the country's financial stability for now, but a possible interest-rate increase in the U.S. and unpredictable oil prices keep the central bank ready to intervene.
        Fitch said Russia's ratings "balance a strong sovereign balance sheet and low sovereign financing needs against structural weaknesses (commodity dependence and governance risks), high growth volatility and geopolitical tensions."
        Write to Josh Beckerman at josh.beckerman@wsj.com
        (END) Dow Jones Newswires

        July 03, 2015 16:57 ET (20:57 GMT)

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