OREANDA-NEWS. December 9, 2008. International rating agency Standard & Poor’s has downgraded Russia’s long-term currency rating to ВВВ from ВВВ+ and also its short-term rating to А-3 from А-2. As the agency said in a press release, the outlook for the long-term ratings is negative. At the same time, the short-term local currency rating was affirmed at the current level (А-2). Furthermore, the agency lowered the country’s long-term sovereign currency obligations rating to ВВВ+ from А-.

The downgrade also involved the rating of currency transfer and conversion risks for Russian non-sovereign issuers to ВВВ from ВВВ+. “Since August 2008 Russia’s international reserves have dropped from USD 583 bn to USD 455 bn (74% of external financing needs in 2009). Pressure on financial accounts came from advance payment or hedging by Russian concerns of borrowings denominated in foreign currencies, currency obligations refinanced by lending institutions within the country with assistance from state-controlled banks, and capital outflow on the part of residents, whereas the Central Bank of Russia has been attempting to cushion growing pressure on the ruble from other currencies. In addition, the balance of payments and current account indicators have deteriorated” – the rating agency pointed out in a press release.