RUSSIA'S CREDIT RATING DOWNGRADED

Unsurprisingly, Fitch has slashed (link) Russia's credit rating to BBB, just two ranks above the junk grade. The main driver behind lower credit grade is a deteriorating shape of capital markets accelerated by a snip decline in commodity prices which, of course, left an open struggle for the financial sector to refinance the external debt which is a difficult task if the financial sector suffers from unstable macroeconomic environment with high and volatile inflation rate (14.1 percent in 2008) and possible exchange-rate overshooting.