Fitch Ratings international rating agency has downgraded Armenia's long-term foreign and local currency Issuer Default Ratings (IDRs) to 'B+' from 'BB-'. The Outlook is Stable.

The issue ratings on Armenia's senior unsecured foreign and local currency bonds have also been downgraded to 'B+' from 'BB-'. The Country Ceiling has been revised to 'BB-' from 'BB' and the Short-term foreign currency IDR affirmed at 'B'.

The downgrade of Armenia's Long-term IDRs reflects the following key rating drivers and their relative weights:

-Armenia is highly exposed to the severe economic downturn in Russia (BBB-/Negative), which will weigh heavily on Armenia's balance of payment and growth prospects.

-The current account deficit is expected to widen again in 2015 as a result of a sharp reduction in both remittances inflows and export demand from Russia.

-Foreign currency reserves at the Central Bank of Armenia (CBA) are expected to continue their downward trend from a relatively low level of USD1.49bln in December 2014.