MOSCOW
Credit rating agency, Standard & Poor, announced Monday that it downgraded Russia's credit rating from BBB- to BB+ "negative."
This is the first time in over a decade that Russia's rating has been reduced to the level of "junk."
According to the service's announcement published on its website, "the Russian Federation's monetary policy flexibility has weakened, as have its economic growth prospects."
"The outlook is negative, reflecting our view that Russia's monetary policy flexibility could diminish further. We could lower the ratings if external and fiscal buffers deteriorate over the next 12 months faster than we currently expect," the statement read.
The news was met with a significant reaction in the foreign exchange market, with the ruble falling to 68.75 against the dollar, correcting itself Tuesday morning to 67.98.
Reacting to the news, Russia's Minister for Economic Development Alexei Ulyukaev called the downgrade "unjustified" in an interview with Russia's Rossiya 24 TV network.
"They have added risks which I consider unjustified, but nevertheless, this is a significant downgrade of the Russian Federation's rating," Ulyukaev said.
Standard & Poor's recent downgrade comes after similar downgrades from Fitch Ratings and Moody's earlier this month. The last time Russia's rating had been downgraded to "junk level" was in 1998, when the Russian government experienced a default on its debt obligations.
