Moody's puts Russia on review for downgrade

Washington (AFP) - Moody's put Russia's credit rating on review for a possible downgrade Friday, saying the Ukraine crisis could exacerbate its already troubled economy.

The ratings agency's Investor Service said that if the review confirms that Russia's economic strength is being eroded by the situation, it could lead to a one-notch cut in the country's Baa1 rating.

The current crisis "could significantly dampen investor sentiment for several years to come by adding to existing deterrents to investment posed by Russia's weak rule of law and high levels of corruption," Moody's said.

"This could further damage the country's economic outlook given its large investment needs," it added.

"It could also further constrain its ability to diversify the economy away from overreliance on oil and gas."

Moody's said it expects that the conflict could contribute to an economic contraction of around 1.0 percent in 2014, against previous expectations of 2 percent growth.