Ministry of Finance of the Russian Federation
Ministry of Finance of the Russian Federation

PRESS RELEASE Russian Federation Rating Upgrade by Standard & Poor’s and Moody’s


Moscow, 18 December 2002. Moody’s, the international rating agency, on 17 December 2002 upgraded Russia’s long term foreign currency rating from Ba3 to Ba2. This follows Standard & Poor’s upgrade of Russia’s long-term sovereign foreign currency rating from BB — to BB and Russia’s long-term local currency rating from BB — to BB+ (two notches) on 5 December 2002. The outlook for both long term ratings is stable.

The rating agencies credited the upgrades to the Government’s reform efforts and credible economic policies as well as improving political stability.

According to rating agency analysts, enhanced political support for balanced fiscal management and continued improvements in sovereign debt management will avert the possibility of a return to large budgetary deficits in the medium-term, even if oil prices fall. In the near-term, the significant financial reserves accumulated by the Government will ensure the necessary flexibility to address next year’s peak in debt service.

The rating agencies also underlined the important progress made by the Central Bank of Russia in realising a number of key initial banking sector reforms. Judicial and pension fund reform were also taken into account in the rating upgrade.

The Russian Government views the recent upgrades as a reflection of the significant progress made to date on its ambitious reform program. The Government is confident that its continued pursuit of macroeconomic, financial and political reform will lead to an investment grade rating in the not too distant future.