S&P cuts Russia rating a notch to BBB-, outlook negative

MOSCOW - Agence France-Presse

Russia saw capital outflows in the first quarter of 2014 double from a year earlier to $50.6 billion. AFP Photo

Standard and Poor's on Friday cut Russia's credit rating a notch to BBB- and kept its outlook negative, citing a risk of increased capital flight amid the Ukraine crisis.

Russia saw capital outflows in the first quarter of 2014 double from a year earlier to $50.6 billion (37 billion euros) over the uncertainty created by the Ukraine crisis.

The government estimates that capital outflows could reach between $70 billion to $100 billion for the full year.

"In our view, the large capital outflows from Russia in the first quarter of 2014 heighten the risk of a marked deterioration in external financing," the ratings agency said in a statement.

It warned that it could cut Russia's ratings further "if we perceived increased risks to Russia's creditworthiness stemming from much weaker medium-term economic growth or due to reduced monetary policy flexibility".

"We could also lower our ratings on Russia if tighter sanctions were to result in additional weakening of Russia's net external position."

The United States and the European Union have already imposed sanctions on Russia over the Ukraine crisis, which has sparked the biggest East-West standoff since the end of the Cold War, and have threatened to impose more.