Moody's Investors Service upgraded Russia's economic ratings. All ratings stable

Moody's Investors Service upgraded Russia's foreign currency country ceiling for bonds to Ba3 from B2. Consequently, all outstanding Russian Federation Eurobonds are now rated Ba3. The rating agency also raised the foreign currency bank deposit ceiling to B1 from B3. Ministry of Finance Bonds (MinFins) tranches VI and VII have had their ratings raised to B1 from B3, while MinFin tranches IV and V are raised to B3 from Caa3. Russian rouble denominated medium-to-long term savings bonds (OFZs) are upgraded to B1 from B3. All ratings carry a "stable outlook".

The Russian economy has experienced a period of rapid economic growth, combined with impressive fiscal consolidation and prudent monetary policy. President Putin's administration has brought political stability, a determined approach to structural reform, and an improved commitment to debt servicing. Russia's budget and economy will survive the current disagreement with OPEC, with the most likely scenario an outcome that allows Russia to free-ride alongside OPEC production cuts.

Moody's will continue to monitor the relationship between energy sector revenues and the budget, the impact of exchange rate movements on the non-energy sectors of the economy, and structural reform in the natural monopolies, including reform to abolish tariff distortions.