Fitch affirms Moscow long-term ratings

Fitch Ratings said it has affirmed the Moscow's long-term foreign and local currency ratings at BBB. The short-term rating is also affirmed at F3.

The outlook is stable.

Fitch said the ratings reflect continued improvements in Russia's economic environment in the last two to three years, which have had a direct positive impact on Moscow's revenue in view of the large component of economically sensitive taxes in its budget.

The ratings also take into account the recent changes in Russia's institutional framework. In particular, the social benefits reform, along with the salary increases in public sector, has placed an additional burden on the city's budget. The ratings also reflect Moscow's potential foreign currency risk in view of its substantial exposure to unhedged foreign currency debt, the agency noted.

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