The ratings agency Standard & Poors has cut Russia’s credit rating to junk, or below investment grade, making it made it harder for Russia to borrow money from investors. CCTV’s Tom Barton reported this story from Moscow.
Standard & Poors cuts Russia’s rating to junkThe ratings agency Standard & Poors has cut Russia's credit rating to junk, or below investment grade, making it made it harder for Russia to borrow money from investors. CCTV’s Tom Barton reported this story from Moscow.
This is the first time in a decade that Standard & Poors has cut Russia’s rating to junk. Russian Finance Minister Anton Siluanov said the decision was excessively pessimistic and that it likely didn’t take into account Russia’s anti-crisis finance plan.
The rating of BB+ put in in the same category as Bulgaria and Indonesia.
“The oil price decline has its own set of drivers and certainly the economic sanctions — it’s not just their direct effect on Russia, it’s the affect they are having on trust and the business climate in Russia — which I think is really dampening and causing withdrawal of foreign investment which Russia desperately needs if it wants to keep modernizing and diversifying its economy,” Dean of Blavatnik School of Government in the United Kingdom Nairi Woods said.
Siluanov said Russia’s anti-crisis plan doesn’t include increasing government spending and that the aim was not to spend Russia’s reserves irresponsibly.
Analyst Andrey Nechaev said the Russian government will inevitably be dragged into more spending.
Russia’s economy is expected to contract by four to five percent this year and the Russian rouble has lost more than 40 percent of its value against the dollar amid falling oil prices and international sanctions over its actions in Ukraine.