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    Finance Minister Says S&P Rating Action on Russia 'Excessively Pessimistic'

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    Russian Finance Minister Anton Siluanov commented on S&P lowering Russia's sovereign ratings earlier on Monday to 'junk' status with negative outlook, saying that it did not take into account a number of factors, characterizing strong sides of the country's economy.

    MOSCOW, January 26 (Sputnik) — The decision by Standard & Poor's ratings agency to downgrade Russia's sovereign rating shows excessive pessimism and ignores strong sides of the Russian economy, Finance Minister Anton Siluanov said on Monday.

    S&P lowered Russia's sovereign ratings earlier on Monday to 'junk' status from BBB- to BB+ with negative outlook.

    "The decision does not take into account a number of factors, characterizing strong sides of the Russian economy: accumulation of large international reserves, including sovereign funds,…as well as an extremely low level of state debt — Russia's unquestionable advantages in the current macroeconomic situation," Siluanov said.

    "In general, we don't see any reasons to dramatize the situation as foreign investors could be prompted to withdraw capital from Russian assets, following the downgrade of investment rating issued by at least two rating agencies," the minister stressed.

    Siluanov added that the risk of mass demands for early repayment from Russian debt issuers is "largely exaggerated."

    In the beginning of 2015, two other prominent international ratings agencies — Fitch and Moody’s — downgraded Russia’s long- and short-term sovereign credit ratings to just a notch above "junk" status. The agencies cited the sharp decrease in oil prices and Russia’s deteriorating financial flexibility as the reasons behind the downgrade.

    A “junk” status rating suggests that a country or a company is likely to default on its debt. In light of the news about Russia’s downgrade by S&P, the already weakened ruble started to slip against the dollar and the euro.


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