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Russia's rating upgrade a fair appraisal of economic reform

MOSCOW. May 13 (Interfax) - The return of Russia's maximum sovereign credit rating was a fair appraisal of the post-crisis economic reforms, Deputy Prime Minister and Finance Minister Alexei Kudrin said following the Fitch two-notch upgrade to BB+ from BB-.

Now Russia's sovereign rating is one notch below investment level according to the Fitch scale.

"We are approaching complete acknowledgement that the Russian economy is reliable and an effective place for investment," he said. An important task now is to eliminate all surplus administrative functions and barriers in the economy, and especially do away with situations where officials can be solely responsible for the fate of an entrepreneur and their business.

Achieving an investment rating will increase Russia's investment appeal, lower the yield of government securities, reduce the cost of new borrowing, and make it easier for private Russian companies to enter foreign borrowing and investment markets.

An investment rating will open wider access to the Russian debt instruments market for major foreign investors, pension funds and mutual funds, and insurance companies, as internal regulations mean these organizations can only invest in reliable debt instruments. The arrival of such large conservative investors to this segment of the market would be a signal for other players to invest, Kudrin said.