S&P reduced Russian credit rating

The International rating agency Standard & Poor's lowered the long-term rating of Russia for obligations in foreign currency to the level of "BBB" with "BBV" with the forecast "Negative", reports Lenta.ru.

S&P explained the decrease in Russia's credit rating with an outflow of capital from the country in the first quarter of 2014 and reducing the possibilities to attract financing in foreign financial markets. “We believe that the difficult geopolitical situation between Russia and Ukraine can lead to an additional significant outflow of both foreign and local capital from the Russian economy, undermining already weak growth prospects,” the agency notes.

At the end of March, the Fitch agency also changed the forecast from the "stable" to the "negative". The agency explained the revision of ratings with a potential impact of sanctions on Russian economies and a business climate. "Since in the current conditions, banks of the EU and the United States may reluctantly credit Russia, the economy can slow down even more, and the private sector may need support," Fitch noted.

In response to reducing ratings by international agencies, the Russian authorities announced the need to support the creation of a domestic global rating agency. The government motivates such a step with fears that the country's rating may be underestimated due to political pressure on world rating institutions by foreign states.

The issue of creating a national agency was discussed on April 23 at a meeting with the First Deputy Prime Minister Igor Shuvalov. Most of the participants in the meeting expressed the position that the domestic rating agency should be created without state participation. In addition, the Cabinet of Ministers confirmed that despite plans to promote the National Agency, the state is not going to refuse to work with the "Big Three": S&P, Moody's and Fitch.