By Josh Beckerman
Fitch Ratings affirmed its investment-grade rating for Russia,
while maintaining its negative outlook for the nation.
Downgrades from Standard & Poor's Ratings Services and
Moody's Investors Service earlier this year placed Russia's ratings
in junk territory. On Friday, Fitch maintained the triple-B-minus
rating, on the brink of junk status. That rating has been in place
since a one-notch downgrade in January.
Fitch forecasts Russia's economy will contract by 3.5% this
year, compared with a January expectation of a 4% contraction.
"Alongside ever-present oil price risks, a worsening in
geopolitical tensions remains the biggest risk" to the
stabilization of Russia's economy, Fitch said.
Low oil prices, the conflict involving Russian-backed
separatists in Ukraine and the weakened ruble are among the factors
that ratings firms have cited in their downgrades.
In a report last month, the Bank of Russia said sufficient
reserves and flexible monetary policy ensure the country's
financial stability for now, but a possible interest-rate increase
in the U.S. and unpredictable oil prices keep the central bank
ready to intervene.
Fitch said Russia's ratings "balance a strong sovereign balance
sheet and low sovereign financing needs against structural
weaknesses (commodity dependence and governance risks), high growth
volatility and geopolitical tensions."
Write to Josh Beckerman at josh.beckerman@wsj.com