S&P’s Russia Junk Warning Shows Ruble Rebound Comes Late - Bloomberg

S&P’s Russia Junk Warning Shows Ruble Rebound Comes Late - Bloomberg:



"For all of the progress Russia has made over the past week in stabilizing the ruble and quelling its financial crisis, Standard & Poor’s delivered a reminder of just how precarious the situation remains.



S&P said it’s considering cutting Russia’s credit-rating to junk, or below investment grade, for the first time in a decade as the looming recession spurs concern that the nation’s banks will face mounting bad loans. Hours before S&P released its statement yesterday, lawmakers sought to address that very concern, pushing through legislation that will allow President Vladimir Putin’s government to bail out struggling lenders.



While the move was anticipated -- bond investors have been trading the country’s debt as if it were junk-rated for weeks -- the timing was odd. Policy makers have orchestrated a 47 percent rebound in the ruble since it plunged to a record-low 80.10 a dollar Dec. 16 by pushing exporters to bring money back into the country and by creating a credit crunch that cut off some investors from the local currency needed to buy dollars."



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