Fitch Ratings has affirmed the Russian Federations issuer default foreign and national currency ratings at BBB+, with a stable outlook. At the same time, the agency confirmed Russias short-term rating at F2 and country ceiling rating of A-.
The favorable rating factor for the Russian Federation is stable state finances. Based on Fitch estimates, this year budget surplus will be equal to some 5% of GDP. This should enable Russia to cut its sovereign debt to only 9% of GDP (this figure is much lower than the average (31%) for BBB-rated countries) and increase the stabilization funds assets to approximately 14% of GDP by the end of 2007. The tangible weakening of the fiscal and budget policy, which is currently seen, could result in Russia running no budget surplus in 2008. At the same time, fiscal and budgetary initiatives and those involving the stabilization funds structure should tighten money management discipline in the future.
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[Source: Russian Stock Market Blog]
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