Rating agencies have turned against Russia

Moody's ratings agency has shifted Russia's government bond rating to Baa3/Prime 3 from Baa2/Prime 2, the agency has said in a statement.

Moody's said it also “lowered Russia's country ceilings for foreign currency debt to Baa3/Prime 3 from Baa2/Prime 2.

The rating of the Russian Federation, which in October was lowered by the Agency to Baa2, has been sent for revision. The prediction has been changed to negative.

Further decisions will be made based on the level of reserves of Russia, forecasts for oil prices and the effectiveness of the Russian Central Bank in conditions of restricted access to the international capital market for Russian borrowers. The exchange rate of the ruble, sanctions, capital flows, the impact of the recession and inflation on the government's fiscal position and the policy response to domestic or external financial pressures will be assessed. Moody's notes that the government's balance sheet remains ostensibly very strong, with very low debt levels and a recent track record of fiscal prudence. Even with a significant further weakening of the country's reserves position, Russia's liquidity ratios would remain relatively strong, according to RBC.

This week, the Fitch agency repeatedly announced the downgrades of a number of Russian companies, banks and regions.

On January 13, Issuer Default Ratings (IDR) in foreign and local currency of "Gazprom", Lukoil and Russian Railways were downgraded from BBB to BBB- . The Novatek rating remained at "BBB-", but the outlook changed to negative.

Yesterday, long-term issuer default ratings on liabilities in the foreign and local currency of Moscow, St. Petersburg, Tatarstan, the Tyumen region and the Khanty-Mansi Autonomous area were downgraded from BBB to BBB- , their prognosis is negative.

A similar decision was taken in the banking sector. DR for Sberbank and Vnesheconombank was downgraded to BBB- from BBB with a negative outlook, for Gazprombank and Rosselkhozbank to "junk" BB + from BBB- with a negative outlook.

In addition, the ratings have deteriorated for 26 other banks and their subsidiaries.