S&P affirms Russia's BBB- Rating

S&P also affirmed the long-term national scale rating on Russia at 'ruAAA'.

Standard & Poor's Ratings Services has affirmed its 'BBB-/A-3' long- and short-term foreign currency sovereign credit ratings and its 'BBB/A-2' long- and short-term local currency sovereign credit ratings on Russia, the agency said in a press release.

The outlook remains negative.

S&P also affirmed the long-term national scale rating on Russia at 'ruAAA'.

"The ratings are supported by the economy's net external asset position and the Russian government's modest net debtor position, which we expect to be maintained in 2014-2017. Our base case assumes that the sanctions on Russia will remain in place over the forecast horizon, absent a de-escalation of the conflict in Ukraine. However, the situation remains fluid and should sanctions ease, one possible consequence could be a modest boost to the Russian economy," S&P said.

"The ratings remain constrained by our view of the structural weaknesses in Russia's economy, in particular the strong dependence on hydrocarbons and other commodities. Russia's relatively weak political and economic institutions also constrain the ratings and impede the economy's competitiveness and its business and investment climates. The incorporation of Crimea in March 2014 and the perception that Russia has supported pro-Russian rebels in Eastern Ukraine has resulted in sanctions being applied to Russia and international capital markets being largely closed to Russian entities. Although we view Russian corporates and banks rated by Standard & Poor's as having sufficient foreign currency to meet their funding needs through to end-2015, we believe that less-financially-robust entities outside the rated universe are likely to experience deteriorating financial profiles. We anticipate that asset quality in the financial system will deteriorate as a result," it said.

Read more: Russia to move gradually towards floating ruble rate, using reserves for balancing - Putin

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