Moody’s Investors Service and Fitch Ratings cuts credit rating of Russia to junk in response to mounted international sanction imposed on the country the past week.
Moody’s downgraded Russia’s long-term foreign debt rating to B3 from Baa3 Thursday. It cited “heightened risk of disruption to sovereign debt repayment given the severe and coordinated sanctions and significant concerns around Russia’s willingness to service its obligations.”
While Fitch lowered Russia six levels to B from BBB and placed the rating on negative watch Wednesday, citing weakening external and public finances, slowing growth, elevated domestic and geopolitical risk and the potential for further sanctions.
Sanctions have “heightened macro-financial stability risks” and represent a huge shock to Russia’s credit fundamentals, Fitch said in a statement.
“We assume U.S. sanctions prohibiting transactions with the Ministry of Finance will not impede the servicing of Russia’s sovereign debt but this is unclear and the risk of such a severe measure has increased markedly,” Fitch analysts wrote.
