Moody’s: Deterioration of relations between Moscow and Kiev threatens Russian economy
Experts from Moody’s believe that if clashes take place in the Crimea, it will lead to a strengthening and extension of sanctions against Russia, which will have a negative effect on the restoration of the country’s economy.
Moody’s Investors Service warns that deterioration of relations between Moscow and Kiev can jeopardize the restoration of Russia’s economy. This was reported in the agency’s review, published on August 15.
“If clashes take place in the Crimea and intensify in the Donbas then, probably, international sanctions will be strengthened and extended. It will renew the capital flight and weaken the exchange rate of the ruble and, eventually, the economic recovery of Russia would be in jeopardy,” Moody’s experts believe. They also note that tensions between Moscow and Kiev could have a negative effect on Russia’s credit rating, at the “junk” Ba1 level since February 2015.
According to observations made by experts, the Russian economy began to stabilize despite the continued volatility of the oil market. On August 10, the Russian Federation Federal Security Service (FSB) reported that it neutralized a group of Ukrainian saboteurs in Armyansk on the Crimean peninsula.
The agency claims that an FSB agent and one serviceman were killed during detention. The report states that the FSB prevented terrorist acts that targeted important infrastructure facilities of the peninsula.
The president of Russia, Vladimir Putin, accused Ukraine of "transitioning to terror". In turn, Kiev denied the accusations from Moscow, and the president of Ukraine, Petro Poroshenko, said the accusation of sabotage was a pretex for further military threats from Russia. The president of Ukraine ordered that divisions on the border with the Crimea and along the contact line in the Donbas be put on high alert.