S&P cuts Russian Federation

Standard & Poor's said it lowered its long- and short-term foreign currency sovereign ratings on the Russian Federation to BBB-/A-3 from BBB/A-2.

At the same time, the agency lowered the long-term local currency sovereign rating to BBB from BBB+, while the short-term local currency sovereign rating was affirmed at A-2.

The outlooks are negative.

S&P also revised down the transfer and convertibility assessment to BBB- from BBB.

The ruAAA long-term national scale rating on Russia was affirmed.

On March 20, the agency said that it could reassess the risks to Russia's creditworthiness based on its deteriorating external profile.

This downgrade reflects the risk S&P perceives of a continuation of the large financial outflows observed in the first quarter of 2014, during which the size of Russia's financial account deficit was almost twice that of the current account surplus.

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