Fitch upgrades Moscow

Fitch Ratings said it upgraded the Russian city of Moscow's long-term foreign and local currency ratings to BBB+ from BBB and short-term foreign currency rating to F2 from F3.

The outlooks on all long-term ratings remain stable.

This rating action follows the recent upgrade of the Russian Federation's foreign currency and local currency issuer default ratings to BBB+ from BBB a with stable outlook.

Fitch said the rating upgrades reflect continued growth in Moscow's strong and dynamic local economy, supported by further improvements in Russia's economy, large current surpluses and a high capacity for debt financing.

The stable outlook reflects Fitch's expectations that Moscow's dynamic tax revenue growth, spurred by national and local economic improvements, will help maintain the city's strong credit quality.

Nevertheless, future upgrade will not only depend on further economic buoyancy and strong fiscal performance, but also greater transparency on the wider public sector, the agency said. At the beginning of 2006, Moscow owned 814 public companies and had stakes in some 600 entities involved in a broad cross-section of industries.

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