Moody’s assessment is in contrast to that of Fitch Ratings, which said last week the U.S. sanctions would limit Russia’s potential economic growth and severely impact targeted companies.
Rating agency Moody’s Investors Service said on Wednesday Russia’s strong public and external finances would shield its economy from the impact of the latest U.S. sanctions.
However, the sanctions will be credit negative for some Russian debt issuers, especially Russian aluminum giant United Company Rusal Plc, Moody’s said in a report.
The Russian banking system has enough earnings capacity for absorbing credit losses arising from exposures to sanctioned companies, the rating agency said.
The U.S. Treasury imposed sanctions earlier this month on seven Russian oligarchs and 12 companies they own or control, as well as 17 senior Russian government officials. Moscow calls these sanctions unlawful and has warned retaliation.
“Russia’s sovereign credit profile – its rating is Ba1 with a positive outlook – is well positioned to withstand the impact of new sanctions,” said Kristin Lindow, a Moody’s Senior Vice President and co-author of the report.
“Higher oil prices will help the government to make further progress in rebuilding its fiscal savings.”
The risk to Russia’s credit profile comes from the possibility of Russian entities being cut off from the international capital market for some time, Moody’s noted.
Moody’s expects the Russian government to increase support to regions facing a fall in revenues due to the sanctions.
Washington cites Russia’s 2014 annexation of Crimea from Ukraine, involvement in the Syrian civil war and alleged meddling in the 2016 U.S. presidential election for the sanctions.
Russia’s Medvedev Says He Backs Criminalizing Observance of U.S. Sanctions
Russian Prime Minister Dmitry Medvedev backs the idea of making it a criminal offense for Russians to observe sanctions imposed by the United States, Medvedev said in an interview broadcast on Saturday on state TV channel Rossia 1.
Washington imposed sweeping sanctions on some of Russia’s biggest companies and businessmen on April 6, striking at allies of President Vladimir Putin to punish Moscow for its alleged meddling in the 2016 U.S. presidential election and other so-called malign activities.
Asked about a proposal drafted by Russia’s lower house of parliament to criminalize observance of U.S. sanctions, Medvedev said the restrictions were aimed at destroying Russia’s socio-political system and harming the economy and individuals.
“If this is so, then the implementation of these sanctions by citizens of our country should be an offense. No one should have the right to observe these American sanctions for fear of having to take administrative or criminal liability,” he said.
Medvedev also said that the government should support sanctions-hit Russian companies to ensure that jobs are not lost.
Speaking on other issues, he said that Russia was on the brink of making a decision on raising the pension age.
Commenting on his own plans for the future, he said he wanted to continue working in a role that brought maximum benefit to his country.
Russia’s Medvedev Vows to Help Firms Hit by U.S. Sanctions
Russian Prime Minister Dmitry Medvedev said on Thursday sanctions-hit Russian companies that have fallen into difficulties should receive support from the state to help them retain staff.
The U.S. Treasury on April 6 announced sanctions against seven Russian oligarchs and 12 companies they own or control, saying they were profiting from a Russian state engaged in “malign activities” around the world.
Medvedev also told a government meeting broadcast by state TV that “silly military statements heard from NATO countries have added to uncertainty on markets”.
