International ratings agency Moody's Investors Service has upgraded Russia’s rating to investment grade, returning the country to a hat trick of investment grades from the leading ratings agencies.

"The upgrade of Russia's ratings reflects the positive impact of policies enacted in recent years to strengthen Russia's already robust public finance and external metrics and reduce the country's vulnerability to external shocks including fresh sanctions. The stable outlook reflects evenly balanced upside and downside credit risks," the agency said.

By upgrading Russia's rating, Moody's has “acknowledged apparent successes of Russia's economic policy,” Russia's First Deputy Prime Minister and Finance Minister Anton Siluanov told reporters on February 9, as cited by Tass.

Moody's increased Russia's rating to Baa3 with stable outlook, which is an investment grade rating.

"I am glad that obvious successes of Russia's economic policy were acknowledged by Moody's. Now all three global ratings agencies will recommend their clients to invest in our country. This is a fair decision, even though somewhat late. It was based on the high quality of Russian authorities' macroeconomic, fiscal, monetary policy," Siluanov said.

"The Russian government will in turn create new prerequisites for further improving the country's rating," he added.

Despite the sanctions and below potential economic growth in 2018 the country’s macroeconomic fundamentals are rock solid. The government finished 2018 with a triple surplus for the first time in years.

The trade account has been surplus since the boom years as although the price of oil fell, which leads to a devaluation of the ruble, this in turn depresses imports in compensation. The current account surplus hit an all time high of $115bn, partly from the rise in oil prices last year, but just as much from the government’s cuts that brought the breakeven price of oil for the budget down to $49. The federal budget also put in a whopping 2.7% of GDP surplus for the first time in years based on much the same reasons.

Russia lost its investment grade rating status after sanctions were first imposed in 2014 following its annexation of the Crimea that year. Russia was first upgraded to investment grade by all three agencies in 2003 at the start of a five-year long economic boom that saw the economy double in size.

With its investment grade rating back, in theory Russian assets are open to investment by the world’s most conservative money managers such as pension and insurance funds. However, with the spectre of more US sanctions on the cards for this year it is unlikely that any of this institutional money will be invested in Russian stocks or bonds until there is more clarity on the politics.