Fitch Upgrades Russian Sovereign Credit Rating
The Fitch home rating agency upgraded the long-term sovereign credit rating of Russia from BBB-to BBB with the stable outlook on August 9th. Russia’s sovereign rating upgrade by Fitch is an indication that the national economy is adapting to current challenges and can reach higher growth rates.
Ratings agencies such as Fitch – who are one of the largest – are businesses that assesses the financial strength of companies and government entities, especially their ability to meet principal and interest payments on their debts. The rating assigned to a given debt shows an agency’s level of confidence that the borrower will honor its debt obligations as agreed. Each agency uses unique letter-based scores to indicate if a debt has a low or high default risk and the financial stability of its issuer. The debt issuers may be sovereign nations, local and state governments, special purpose institutions, companies, or non-profit organizations. Such ratings are used by banks and other international financial institutions and affect the rate of interest that national banks and governments can borrow at, and their ease in doing so.
Russia is one of the least indebted countries in the world and has one of the world’s lowest public debt to GDP ratios.
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