Russia’s Credit Rating Cut to Baa2 by Moody’s on Sluggish GrowthBoris Korby
Russia’s credit rating was cut by Moody’s Investors Service, which cited sluggish growth prospects worsened by the crisis in Ukraine and international sanctions.
Moody’s downgraded the government one level to Baa2, the second-lowest investment grade, from Baa1, and kept a negative outlook on the country’s rating.
The continued erosion of Russia’s foreign-exchange reserves because of capital flight, low oil prices and borrowers’ lack of access to international capital markets also prompted the rating cut, Moody’s said. The economy will expand 0.3 percent in 2014, the worst performance since output shrank in 2009, according to analysts surveyed by Bloomberg.
“The military confrontation in Ukraine and escalating sanctions against Russia are likely to have an increasingly negative macroeconomic impact on Russia’s investment climate and consequently on its medium-term growth prospects,” Moody’s said in a report.