Credit ratings agency Fitch has revised down its outlook for Russian debt to mirror the potential impact of sanctions. The move is a first step towards a full ratings cut, but Moscow claims there is no basis for it.
Fitch Ratings revised its outlook on Russia's creditworthiness from stable to negative, while maintaining its triple B debt rating, the international financial services agency announced Friday.
The decision followed a similar move by agency Standard & Poor's on Thursday, and reflected the potential impact of sanctions on Russia's economy and business environment.
“Since US and EU banks and investors may well be reluctant to lend to Russia under the current circumstances, the economy may slow further and the private sector may require official support,” the agency said in a statement.
On Thursday, US President Barack Obama ordered economic sanctions against 20 Russians, including members of President Vladimir Putin's inner circle. The punitive measures came in the wake of Moscow's takeover of Crimea and followed a European Union asset freeze and travel ban on another 12 Russians and Ukrainians, now totaling 33.
Raising the specter of more US and EU sanctions, Fitch said foreign investors may anticipate restrictions to Russian entities' access to external financing. In a worst-case scenario, the US may prevent foreign financial institutions from doing business with Russian banks and corporations, it added.
On Friday, Russian Deputy Finance Minister Alexei Moiseev criticized the downgrade, saying there was no basis for the decision.
“Our creditworthiness has not changed. We are going to have a budget this year that will be better than expected,” he said.
The outlook revision on Russia's long-term debt caused Moscow's MICEX stock market index to tumble nearly 3 percent in early trading on Friday. Companies co-owned by those Russians affected by the sanctions performed worst.
uhe/jr (AFP, AP, dpa, Reuters)