The Kremlin is shelving plans to expand its international broadcasts as Russia’s economic crisis worsens amid a continuing drop in the value of the ruble.
Russian media reports say that international English-language TV and radio services RT (Russia Today) and Sputnik will get only half their previous budgets this year amid the currency woes. The news came as credit ratings agency Standard & Poor’s Tuesday slashed Russia’s debt to “junk” status for the first time in more than a decade. The move makes borrowing more expensive.
RT, which has been criticized for spouting Kremlin propaganda and threatened with action by Britain’s broadcasting regulator over reports from its London bureau, said the ruble’s devaluation has left its budget much weakened. “Our budget is already cut almost in half,” said RT’s editor-in-chief Margarita Simonyan, according to a report in the Moscow Times quoting Russian newspaper Vedomosti.
The state-controlled news outlet will likely have to cut international services and abandon plans for French- and German- language services, she added.
Around 80 percent of RT’s budget is in dollars and euros. Last year, based on a exchange rate of 30.5 rubles to the dollar, its budget amounted to $445 million. With the currency now trading at around 69 rubles for every dollar, this year that budget is currently worth $236 million.
Sputnik, the international foreign-language radio service of state news agency Rossiya Segodnya, launched to much fanfare just two months ago. Its budget is set to plunge from $250 million last year to $100 million this year. Its boss is a controversial state television news anchor who last year said Russia was the only country in the world capable of turning America to “radioactive ash.”
S&P’s decision to downgrade Russia’s credit rating to below investment grade comes nine months after it reduced it to BB+ last April. The latest downgrade was widely expected as plunging oil prices and Western sanctions over last year’s seizure of Ukraine’s Crimean territory have seen the ruble collapse in value against the dollar.