Russian CEO says Moody's underestimates positive trends in Russian economy

Russian Direct Investment Fund CEO Kirill Dmitriev said Saturday that Moody's upgrade of the outlook on the Russian government bond is "positive," but its rating on the Russian assets is still "politicized."

"The outlook upgrade is positive, but Moody's underestimates the positive trends in the Russian economy," Dmitriev was quoted by RIA Novosti news agency as saying.

"If the decisions of rating agencies were not so politicized, Moody's should have changed the rating itself, not just the outlook," he said.

Moody's said earlier it continued the junk rating for Russia's government bond but has upgraded the outlook on such assets from negative to stable due to some improvements.

The Russian government has taken measures to reduce its dependence on oil and gas revenues, and the national economy has been recovering after a nearly two-year-long recession, the rating agency explained.

However, it maintained Russia's Ba1 rating (the best in its junk category) mainly due to Moscow's delay of implementing "a long-promised set of structural reforms" and its "high susceptibility to geopolitical risk."

Moody's said it may lift Russia out of junk rating if the government moves to address economic and fiscal vulnerability and raise growth potential.

In April 2016, Moody's confirmed Russia's Ba1 rating and assigned a negative outlook to reflect the risk of further erosion of the government's fiscal savings in the context of weak oil prices.