Today the international rating agency Moody’s was the first of the ‘big three’ rating agencies that improved the prognosis for government bonds in Russia from ‘negative’ to ‘stable’, affirming their rating at the speculative level of Ba1. It gave the market a hope for the possibility of increase. The agency also changed its prognosis in respect of ratings of 18 Russian companies from ‘negative’ to ‘stable’.
The main reason for changes of the forecast was stabilization of the international investment position of the Russian Federation due to the adjustment of the ruble.
“Taking into account the reduction of tensions in the east of Ukraine, there’s a probability that the economy and finances of the Russian Federation will face with a strong shock during the next 12-18 months, for example from additional international sanctions,” RIA Novosti cites the release.
According to the head of the Russian Ministry of Finance Anton Siluanov, Moody’s improved its prognosis, underlining the recognition of the macroeconomic Russian policy by foreign agencies, but it is necessary to reduce the budget deficit and move towards sustainable economic growth in order to return Russia’s rating to the investment level.
Experts interviewed by correspondents of Vestnik Kavkaza agree that the rating reflects an objective reality. However, the country still has work to do.
Associate Professor of Stock markets and financial engineering at RANHiGS Vasily Yakimkin As noted in an interview with a correspondent of Vestnik Kavkaza that a message about improving the rating by Moody’s is a very positive event for the Russian financial system.
“Against the background of the continuous negativity that there has been during the last few months it is a ray of light. I think this is a hint to investors who want to invest in long-term projects and want to receive high interest from investments that they may consider the Russian market,” the expert believes.
The Professor of the department of the stock market and investments at the Higher School of Economics, Alexander Abramov, was more cautious in assessments of this event for the Russian financial system.
“Certainly, this event won’t lead to some reviving in terms of foreign borrowings. It has rather a moral effect. That is a kind of signal that the international agency considers that Russia’s position is stable. In addition, it is very important from the point of view of relations between Russia and the EU, particularly with regard to the future lifting of sanctions. It gives a signal to Russia that the agancy can give a more stable credit rating prognosis. According to Moody’s, the situation in Ukraine is calming down. Moody’s decision is directly based on these events. It also gives a signal to the EU that Russia fulfills its obligations under the Minsk Agreement, and that it is time to cancel sanctions,” the expert believes.