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Siluanov: Moody’s will assess the risks of Russia’s budget

Силуанов: Moody's оценит риски бюджета России

International rating Agency Moody’s Investors Service put the Russian rating on review for possible reduction, further analyzes the measures the government is undertaking to reduce fiscal risks, said Finance Minister Anton Siluanov, reports “Interfax”.

On March 5, Moody’s raised the Issuer rating and the rating of government bonds of Russia, located at the level of Ba1, on review for possible reduction. In the press release of the Agency among the main reasons are oil prices, the state of the Russian economy and balance of payments.

Unlike 2014, when Russian officials called the actions of rating agencies against Russia politically motivated, this time the critics step Moody’s is not caused.

“Rating Agency Moody’s shows the need of adapting the budgetary system to new realities in the commodities market. The RF government has already prepared measures to promptly respond to the evolving economic situation and considering the issue of the medium-term balanced budget,” Siluanov told journalists on Saturday.

“Moody’s took 2 months for a further analysis of the situation. The Finance Ministry will be with representatives of agencies in regular contact and provide them with all necessary information for a comprehensive and objective analysis of the state of the Russian economy”, – said the Minister.

“During the review, Moody’s will assess the degree of effect of further sharp decline in oil prices, which Moody’s expects will remain low for several years, Russia’s economic performance and balance of payments, including a deficit financing of state obligations in the coming years”,- stated in the message.

The Agency intends to finalize the revision of the ratings of the Russian Federation within two months.

In December last year, Moody’s improved the forecast of the Russian ratings to stable from negative and affirmed the rating at “Ba1”, one notch below investment grade.

As noted by Moody’s, the government of the Russian Federation in its projections assumes average prices of $40 per barrel this year and $45 in the next. Because of discrepancies with forecasts, Moody’s expects significant growth in the budget deficit.

However, the Agency’s analysts note the high level of international reserves of the Russian Federation – $310 billion at the end of January, or 28% of projected this year’s GDP.

During the revision of the ratings, Moody’s will assess the ability of the government to mitigate the impact of the collapse in oil prices on the creditworthiness of the Russian Federation, as well as the clarity, scope and ambition of the government’s plans in relation to the scale of the task.

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