Ruble Weakens As S&P Warns Russia’s Rating Could Fall

The U.S. stock market will not be immune if this gets much worse. RCP

Ruble Weakens As S&P Warns Russia’s Rating Could Fall

Dec. 24 2014 11:03
Last edited 11:04

Pawel Kopczynski / ReutersTraders are pictured at their desks in front of the German share price index DAX board at the Frankfurt stock exchange, on Dec, 22, 2014.

The ruble weakened in early trade on Wednesday, giving up its slight gains seen at opening, after Standard and Poor’s rating agency warned it could downgrade Russia’s rating to speculative in January.

At 10:25 a.m. in Moscow, the ruble was 0.7 percent weaker against the U.S. dollar at 54.88 after opening 0.7 percent up. It lost 0.8 percent versus the euro to 67.00.

Late on Tuesday, S&P revised Russia’s credit ratings to credit watch negative from negative, warning the country’s monetary flexibility deterioration could lead to putting its sovereign rating into junk territory as soon as mid-January.

“We note that S&P’s rating for Russia is currently at the low boundary of the investment-grade category and would lose such a status if downgraded,” analysts at Sberbank Investment Research wrote in a morning note.

“Things would become more complicated if two of three ratings are moved to speculative,” they said.

The Central Bank’s statement that it would start lending money in hard currencies to companies and banks willing to put their foreign loans as collateral did little to help the currency.

The ruble’s decline was softened by exporters selling their foreign currency earnings, responding to the government’s order from Tuesday to start selling hard currency. Companies also need rubles for their monthly tax payments due this week.

See also:

Unofficial Capital Controls Halt Russian Ruble’s Fall

Western Firms Slash Russia Investment Over Ruble Fall

Russian Ruble’s 800-Year History Haunts Current Plunge

December 24, 2014 13:20

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