On September 15, 2017, S&P Global Ratings affirmed its “BB+/B” long-term and short-term foreign currency and “BBB-/A-3” long-term and short-term local currency sovereign credit ratings for Russia.

The outlooks on the long-term ratings remain positive. At the same time, the rating agency revised its transfer and convertibility (T&C) assessment on Russia to “BBB-” from “BB+”, reflecting, among other things, Russia’s track record of not restricting access to foreign exchanges during previous economic crises. While Standard & Poor’s confirmed Russia’s lackluster credit rating, foreign investors remain interested in Russia, according to the country’s Finance Minister.

In its assessment, S&P, one of the “big three” U.S.-based credit rating agencies, stated that Russia’s ongoing recovery and post-election reform momentum could lift Russia’s currently low potential growth, despite the sanctions and low oil prices. The agency noted, however, that Russia’s banking sector is fragile. Yet, S&P opined that fiscal and macroeconomic risks seem to be contained and that there are early signs of lending growth recovery. The agency affirmed its “BB+/B” foreign currency and “BBB-/A-3” local currency sovereign credit ratings. The positive outlook indicates that S&P may raise its ratings for Russia if the recovery in economic trend growth continues or if preserved financial stability translates into stronger bank lending activities.

The Russian Finance Minister Anton Siluanov stated that Russia’s borderline credit rating has not had a negative impact on investors that seek to buy Russian government bonds. According to Minister Siluanov, the foreign investors’ interest is attributable to the Russian government’s mature budgetary policy that made the country’s economy stable. Further, Russia’s new budgetary rules have made the economy less dependent on the price of oil.

In its analysis, S&P has said it expects Russia’s economic recovery to continue through 2020 after a two-year recession. According to the agency, the real GDP will likely increase by 1.8 percent in 2017 and by an average of 1.7 percent from 2017 to 2020, supported by a rebound of oil prices and a moderate expansion of domestic demand on the heels of gradual monetary easing.