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maintained the key interest rate unchanged amid market turbulence.
Russia’s credit ratings have been improving and all three ratings agencies have returned Russia to “investment grade” status (BBB- or more by S&P and Fitch, Baa3 by Moody’s).
Moody’s rates Russia at Baa3 with stable outlook on both its foreign and local currency debt.
Moody’s last upgraded Russia from Ba1 (Positive) in January 2018 as the economy started to emerge from several years of recession. The lowest rating the country had was B3 in August 2008 following the collapse of the ruble that year and technical default on the GKO state treasury bills. The highest the country has scored was Baa1 in March 2013 as economy bounced back from the 2008 crisis.
Fitch rates Ukraine at BBB- on both its foreign and local currency debt with no outlook indicated.
Fitch has been a lot more upbeat on Russia and has consistently ranked if with a treble B rating since 2004 of one sort or another, as it take more account of Russia rock solid fundamentals – the low external debt and large currency reserves. The lowest rating it had was CCC in August 2008 following the currency meltdown. The highest rating was Baa1 in March 2013 thanks to the economic rebound that year.
Standard & Poor’s (S&P) rates both Russia’s foreign debt at BBB- with stable outlook and the local debt at BBB.
S&P has also been fairly consistent on Russia’s rating. Its lowest grade was BB+ (negative) awarded in January 2015. The highest was BBB awarded in December 2008.
8.5 Fixed income
Russia's Finance Ministry is suspending the OFZ federal bond auctions until the market situation stabilises, the ministry said in the statement ahead of the weekly auction on March 12. As reported by bne IntelliNews, the previous auction of March 4 was called off due to the Coronavirus epidemic, but since then the collapse of the Opec+ talks and the drop in oil prices had amplified market turbulence. In the meantime for the first quarter the Finance Ministry has already raised RUB500bn in OFZ auctions out of RUB600bn budgeted. The ministry commented that despite suspending the auctions it has necessary resources to carry out its budget obligations.
Currently the Finance Ministry is not interested in paying a high premium
for new placements, as it has already sold RUB500bn of OFZs in the current quarter out of RUB600bn budgeted, the analysts surveyed by Vedomosti daily on March 3 believe.
Vedomosti reminds that under sanction pressure in September 2018 the ministry had to withdraw from OFZ placements for one month and raised RUB205bn, behind the plan of RUB450bn in the respective quarter.
90 RUSSIA Country Report April 2020 www.intellinews.com