Close panel

  • Home
  • Publications
  • Who we are
  • Big Data
  • Forecasts
    Searcher

    Published on Wednesday, January 28, 2015 | Updated on Wednesday, January 28, 2015

    Russia: S&P complicates the outlook. The worst may not be over yet

    Summary

    On Monday, S&P downgraded Russia’s credit foreign currency sovereign credit rating by one notch to BB+ (junk), keeping the outlook as negative. The key reasons behind the decision were: i) the sharp economic relapse, ii) the central bank’s constraints in achieving the monetary targets, and iii) the possibility of further EU sanctions. The rating downgrade could become a self-fulfilling prophecy for the Russian economy and its financial sector, as it puts other agencies’ investment-grade ratings at risk (with potential exclusion from the big bond indices) and is triggering further exchange-rate depreciation. Given the big corporates’ currency mismatch in terms of liabilities, this would lead to a faster-than-expected deterioration in the macro situation. The worst may not be over yet.

    Geographies

    Authors

    Alvaro Ortiz BBVA Research - Head of Analysis with Big Data
    Ana Rubio BBVA Regulation - Head of Financial Regulation
    Cristina Varela BBVA Research - Principal Economist
    Sara Baliña
    Tomasa Rodrigo BBVA Research - Lead Economist

    Documents and files

    Report (PDF)

    Global Hot Topic_13_ S&Pcomplicates the Russian situation_The worst may not be over yet

    English - January 28, 2015

    New comment

    Be the first to add a comment.

    Load more

    You may also be interested in