Fitch downgrades Russia to BBB- with a negative outlook

An employee counts Russian ruble banknotes at an office in Siberia in December, 2014.
Ilya Naymushin | Reuters
An employee counts Russian ruble banknotes at an office in Siberia in December, 2014.

Fitch Ratings on Friday downgraded Russia's long-term foreign and local currency issuer default ratings to BBB- from BBB, citing sharp falls in oil prices and the ruble. Its outlook on the long-term IDRs is negative.

The ratings agency also downgraded the country's senior unsecured foreign and local currency bonds to BBB- from BBB.

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"The economic outlook has deteriorated significantly since mid-2014 following sharp falls in the oil price and the ruble, coupled with a steep rise in interest rates," Fitch said in a statement.

"Western sanctions first imposed in March 2014 continue to weigh on the economy by blocking Russian banks' and corporates' access to external capital markets."

Oil, Russia's main export, lost more than 50 percent of its value in 2014. Brent posted its seventh sreait weekly loss on Friday wand were trading near their lowest level since April 2009.

Russia imposed steep interest rate hikes last year in an effort to stem a run on the currency.

However, the decision failed to strengthen the struggling currency. The ruble has fallen some 85 percent versus the dollar since the beginning of last year.