Fitch approves Russias BBB rating, upgrades outlook to Stable.

By bne IntelliNews January 25, 2010
International rating agency Fitch Ratings affirmed Russia s long-term Issuer Default Rating in national and foreign currency at BBB, while upgrading the outlook from Negative to Stable. Short term foreign currency IDR is affirmed at F3 and Country Ceiling at BBB+. Fitch attributed the Stable outlook to agencys improved confidence in economic and financial stability in the country, which is due to increase of the oil prices, recovery of the economic activity and capital inflow to the private sector, decreasing inflation, lower risks in the banking sector and budget deficit in 2009 turning out lower than expected. However, the agency is still worried about the quality of the banking assets and expects total bad loans (both restructured and overdue) to peak at 25% this year (as compared to 19% in October 2009). Fitch also notes crediting activity being insufficient to support the recovery. Fitch also revised the outlooks and ratings of the major state-run companies, upgrading outlooks of Gazprom, RusHydro,TransContainer, Sukhoy and Russian Railways from Negative to Stable.

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