Fitch improves outlook on Russia’s rating to stable from negative

MOSCOW, Oct 17 (PRIME) -- International rating agency Fitch has improved its outlook on Russia’s BBB- long-term issuer default ratings in local and foreign currencies to stable from negative, the agency said in a statement late on October 14.

“Russia has implemented a coherent and credible policy response to the sharp fall in oil prices. A flexible exchange rate, inflation targeting, fiscal consolidation and financial sector support have allowed the economy to adjust and domestic confidence to return gradually. The strength and quality of the policy response stands out relative to those of other oil producers similarly affected by the oil price shock,” Fitch said.

The agency expects Russia’s gross domestic product (GDP) to fall 0.5^ in 2016, but to rise 1.3% in 2017 and 2% in 2018. The current account surplus may fall to 2.3% in 2016 from 5.2% in 2015 due to low oil prices. The deficit of the country’s budget is forecasted by the agency to fall to 1.5% in 2018 from 4% in 2016.

Russian Finance Minister Anton Siluanov said that the ministry is satisfied with the agency’s decision. “In its comment, Fitch points out that actions taken by the Bank of Russia and the government in order to normalize the economic situation in response to a fall of oil prices are effective unlike actions taken by other oil producing countries,” he said.

Economic Development Minister Alexei Ulyukayev said separately that the decision of Fitch to improve the outlook on Russia’s rating was an expected decision as it reflects the condition of the country’s economy.

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