Praise from the enemy: What is behind the improvement in Russia's rating from Fitch?
The message that the international rating agency Fitch Ratings has improved the outlook on Russia's sovereign credit rating to "stable" from "negative" is news that causes conflicting feelings.
On the one hand, this is confirmation that anti-Russian sanctions have not achieved their goal. At least for now.
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Fitch Ratings gives compliments: “Russia has implemented a consistent and credible policy response to the sharp drop in oil prices. A flexible exchange rate, inflation targeting, fiscal consolidation and financial sector support have enabled the economy to adjust to the situation and build domestic confidence in a gradual recovery.”
Fitch's message even comments positively on the recent State Duma elections, although what does the rating agency seem to care about the elections in Russia? “The ruling United Russia party strengthened its presence in parliament in the elections held on September 18. The elections went smoothly, without a repeat of the demonstrations that followed the 2011 elections. All other parties represented in parliament generally support the president...”
On the other hand, it’s difficult to call this press release praise. Still, a rating of “BBB-” is just above “speculative grade”, the lowest level of “investment grade”. However, this rating may be the envy of many countries, especially Ukraine, which Fitch Ratings issued “CCC” - “possible default”, despite the receipt of the next tranche from the IMF.
There is another interpretation of Fitch’s assessment - international blackmailers represented by “respected” rating agencies are hinting that Russia can go in the right direction by fulfilling their demands. But for whom is this direction the right one?
It looks like Fitch Ratings is trying to blackmail with a small “-” after the letters “BBB” - this is balancing on the brink. “ВВВ” is a formal signal for international investors, almost a recommendation to make serious investments, and “ВВВ-” is on the verge of “junk”. A kind of “carrot”, which, according to their standards, must be reached for.
Praise from the enemy is alarming. But while Russia is embedded in the global financial system and depends on external factors, including such as ratings from various international agencies, it is forced to play by their rules.
The next publication of the next rating once again makes us think about the problem of establishing the full economic sovereignty of Russia, creating an independent rating agency so that no Fitch, Moody's or Standard & Poor's could influence the financial and economic stability of the state.
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