Moody's decision to downgrade Russia's rating politicized - Russian finance minister
MOSCOW. Feb 21 (Interfax) - In making its decision on downgrading Russia's sovereign debt rating to Ba1, Moody's Investors Service proceeded from an extremely pessimistic scenario and was guided by political factors, says Russian Finance Minister Anton Siluanov.
"I view Moody's judgment as not only extremely negative but also as based on an extremely pessimistic forecast having no analogues today," Siluanov said in commenting on Moody's decision to journalists on Saturday.
Moody's ignored information on the current condition of Russia's economy and its budget and financial policy provided to it by Russian authorities, he said.
"I believe that, in making its decision, the agency was guided primarily by factors of a political nature," he said.
In particular, he mentioned the agency's forecast of capital outflow from Russia in an amount of $400 billion and economy decline by 8.5% in 2015-2016.
"Unfortunately, it's hard to escape the conclusion that, considering the current strong fundamental indicators of the Russian economy, in order to justify the downgrading, the agency had to proceed from radically negative forecasts, including, for instance, that on the simultaneous depletion of the sovereign funds and the national debt's growth to 20% of GDP," he said.
The Finance Ministry said in a press release in commenting on Moody's decision to downgrade Russia's rating that it considered the substantiation of this decision unrealistic, pointing out that the agency disregarded the strong points of Russia's economy and financial system. "The forecast based on which the agency makes its conclusions is much more pessimistic than the existing assessments by international financial organizations and leading world investment banks," it said.
In particular, the predictions made by Moody's that capital outflow in Russia would reach $272 billion in 2015, that its GDP would go down by 8.5% in two years, and that inflation in the country would exceed 22% in 2015 are incomparable with economic forecasts by the IMF, the World Bank, and international banks, it said.
"The agency's conclusion on the simultaneous depletion of the volume of sovereign funds and growth in the national debt level to 20% of GDP appears unfounded," it said.
"Russia has demonstrated over the past several months that it has been able to withstand unprecedented external shocks, primarily the sharp and significant decline in oil prices. Large international reserves, including the sovereign funds, have been accumulated, whose volume has exceeded the volume of the national debt. A low debt level and a current account surplus are Russia's undeniable advantages, whose role has been underestimated by the agency," it said.
The Finance Ministry pointed out that the ruble has strengthened against the U.S. dollar by 11% since the start of February, which is "the best indicator among the currencies of the developing countries." The ministry also insisted that the situation on the markets of mineral resources has stabilized, and the oil prices, after reaching a local minimum in January, has grown by 23% in February. In addition, it said the situation on the domestic debt market has normalized, with the yield of five-year federal loan bonds (OFZ) having declined by 300 basic points since the start of the year.
"The agency has in fact ignored the exhaustive information on budget consolidation and anti-crisis measures being carried out by the Russian government," it said.
The Finance Ministry, however, said it is determined to continue "an open dialogue" with Moody's and other rating services and regularly provide all of them with updated macroeconomic information, expecting that the ratings would be upgraded in the midterm.