FXStreet (Delhi) – Ned Rumpeltin, European Head of Currency Strategy at TD Securities, notes that today we have regular ratings reviews for Russia by both S&P (BB+, negative) and Fitch (BBB- negative) after the Russia was downgraded by all three ratings agencies in the first few months of this year when the conflict in East Ukraine was at its height, oil prices and the ruble were both collapsing, and foreign reserves were falling. Key Quotes “Fitch is currently rating Russia one notch higher than both S&P and Moody’s (Ba1 negative).” “At its July review Fitch said that the following risk factors could lead to a downgrade: 1) a renewed bout of FX volatility leading to financial sector instability; 2) a return to low oil prices and/or continued recession in 2016; 3) faster than expected depletion of FX reserves; and 4) an intensification of sanctions.” “Since then USDRUB has remained volatile, largely following the oil price, but there has been no real increase in financial instability. Oil prices have remained depressed, increasing the chances of a recession for next year also. However, FX reserves have increased a bit from the July levels, as the CBR has used periods of relative ruble strength to rebuild reserves.” “Finally, sanctions have been maintained rather than intensified, although the political situation is hardly improved, with Russia now involved in Syria and no real solution to the East Ukraine conflict in sight.” “We think there is a 50% chance of Fitch downgrading Russia today. However, given that its rating is already one notch lower than Fitch’s, we think that an S&P downgrade is somewhat less likely.” For more information, read our latest forex news.