MOSCOW, May 19. /TASS/. Chinese agency China Chengxin International Credit Rating (CCXI) has raised Russia’s sovereign credit rating to BBB+g with a stable outlook. This is the first such assessment provided by a foreign agency since the beginning of the special military operation in Ukraine, Vedomosti wrote, citing CCXI.
This rating indicates moderate economic and financial stability and a similar default risk, according to the publication. The rating is an improvement over the one before the special military operation, which was BBB-g. After the events of 2022, the Chinese agency initially downgraded Russia’s rating to BBg, and later, in the summer of 2022, withdrew it, the paper said.
The agency explained that the Russian economy has been steadily adjusting to sanctions and showing resilience to shocks, while geopolitical risks have been stabilizing. Moreover, the agency pointed to the prudent financial and monetary policy of Russian authorities, sufficient international reserves and the National Wealth Fund, which strongly support the country in servicing its foreign debt.
Russia fulfills its state debt obligations in full and on time, while the debt level remains low, CCXI added. The expansion of Russia’s military and industrial sector since the beginning of the special military operation has lowered the country’s energy reliance and may enable it to gradually resume civil economic development based on those supply chains, the agency said. At the same time, it expressed concern about the risk of mismatched demand and supply in Russia amid high state spending, a labor shortage, and rising inflationary pressure.
CCXI outlines a number of factors that could support an upgrade of Russia’s rating in the future, Vedomosti said. These include the easing of sanctions, reduced geopolitical risks, and more optimistic economic growth projections. On the other hand, a worsening of the economic outlook due to renewed escalation in Ukraine, depletion of the National Wealth Fund, major shifts in the debt service system, or a loss of control over debt management, potentially leading to a technical default, could prompt the Chinese agency to consider a downgrade.