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Fitch Raises Outlook For Russia On 'Strong' Response To Oil Shock

Russian Finance Minister Anton Siluanov
Russian Finance Minister Anton Siluanov

Fitch Ratings upgraded its outlook for Russia's finances and economic growth, citing the "strength" of Moscow's response to the oil shock that sent Russia into recession two years ago.

Fitch said on October 14 that Russia's economy is slowly recovering and will grow by 1.3 percent next year after shrinking by 0.5 percent this year.

"Russia has implemented a coherent and credible policy response to the sharp fall in oil prices" from over $100 a barrel in 2014 to about half that much today, said Fitch Senior Director Paul Gamble.

"A flexible exchange rate, inflation targeting, fiscal consolidation, and financial sector support have allowed the economy to adjust and domestic confidence to return gradually. The strength and quality of the policy response stands out relative to those of other oil producers similarly affected by the oil price shock," he said.

While Fitch raised its outlook for Russia to "stable" from "negative," it maintained a "junk" rating of BBB-minus on Russia's debt.

Russian Finance Minister Anton Siluanov said on October 14 that he was "satisfied" with Fitch's move, noting it was the second upgrade for Russia from Wall Street raters in less than a month.

With reporting by TASS
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