Global Oil Prices Pushing Russia Closer to Junk Rating

The ruble continues to fall, sanctions are biting and the slide in the price of oil shows no sign of slowing – it’s hitting Russia hard and means a credit rating downgrade to “junk” status could be on the way.

Russia’s Economy Minister Alexei Ulyukayev said on Wednesday that the chances of the beleaguered country’s rating being downgraded to junk were “pretty high,” according to the Interfax news agency.

The comments come after rating agency S&P said last month that it expected to complete a review of Russia — which it already rates at just one notch above junk with a negative outlook — by mid-January.

Meanwhile, the World Bank cuts its growth forecast for Russia. It now expects the country’s economy to contract by 2.9 percent in 2015 — a sharp downward revision from a December forecast of a 0.7 percent contraction.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza