Moody's improves outlook on Russia's rating

Moody's improves outlook on Russia's rating

Moody's Investors Service has today changed the outlook on Russia's government bond rating to stable from negative. At the same time, Moody's has affirmed Russia's government bond rating at Ba1.

The key drivers for the decision to change the rating outlook to stable from negative are the stabilization of Russia's external finances and diminished likelihood of its economy facing a further intense shock.

"At the same time, we do not expect existing sanctions to be removed until the parties involved in the conflict demonstrate their willingness to abide by the terms of the Minsk agreement," TASS cited the agency.

Moody's pointed out that the country's structurally weak growth potential remains an important rating constraint. "Overreliance on the oil and gas industry makes the economy vulnerable to shocks to that sector, and to its highly cyclical nature," the agency added, estimating the economy's potential growth rate at 1-1.5%.