International Fitch Ratings noted that the sharp slowdown in Russia's economy is a significant shock for the economies of other sovereigns in the Commonwealth of Independent States (CIS) region.

It is stated in Fitch’s “Russia Slowdown Hits CIS Sovereigns” report.

According to Fitch, Armenia and Ukraine have the most direct exposure among Fitch-rated sovereigns, while the fall in oil prices has magnified the fallout in Kazakhstan and Azerbaijan.

Fitch noted that the sharp fall in the rouble has been a major factor in significant currency adjustments across the region.

“Russia is Armenia's leading export market and largest source of foreign direct investment and remittances. Russia's slowdown will therefore have a major impact on Armenia's growth prospects, as reflected in our one-notch downgrade of the latter to ‘B+’”, says Fitch.

According to Fitch, Georgia is the less exposed country in the region.

“Both Armenia and Georgia have allowed their currencies to float, providing a shock absorber and preserving foreign-exchange reserves”, says Fitch.  

As to Azerbaijan, the devaluation of national currency poses a risk for the country, but it has a strong buffer.