Financial rating agencies Fitch and Moody's downgraded Russia to the category of countries at risk of not being able to repay their debt, a week after Moscow launched its invasion of Ukraine.
Moody's downgraded its long-term debt rating from Baa3 to B3 and says it will remain on watch amid Western sanctions on Russia, while Fitch downgraded it from BBB to B, with a negative outlook .
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These ratings place Russia's debt in the category of speculative investments and will make it more difficult for the country to finance itself, in addition to sanctions preventing American investors from buying new Russian debt and Moscow from accessing the markets. of European capital.
"
The lowering of Russia's rating by several notches and the maintenance of surveillance (...) were triggered by the heavy sanctions that Western countries imposed on Russia
", in particular against the central bank and the major Russian financial institutions in response to the military invasion of Ukraine, Moody's said in a statement.
The financial rating agency refers to an "
increased risk of disruption
" in the repayment of Russian sovereign debt in the face of "
coordinated sanctions
" and "
major concerns about Russia's willingness
" to service its debt.
According to Moody's, the risk is all the greater as the sanctions, "
with a wider scope and more severe than expected
", limit access to Russia's international reserves intended to absorb major shocks.
Towards more banking sanctions?
Among the economic measures decided against Moscow, the European Union confirmed that seven Russian banks would, from March 12, be excluded from the Swift messaging system, a key cog in international finance.
Fitch says it expects further sanctions against Russian banks, which will cause significant short-term disruption but also longer-term impediments to efficient trade execution.
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The agency asserts that, in the event of a prolongation of the conflict in a context of weaker economic growth, the risk of political instability in Russia is all the greater.
"
The severity of the sanctions (...) represents a huge shock to Russia's credit fundamentals and could undermine its willingness to service its sovereign debt
," Fitch said, adding that a strengthening of the sanctions and a deterioration of the international relations could lead to a further downgrade of the country's rating.
A second round of talks is due to take place on Thursday morning on a ceasefire between Russian and Ukrainian negotiators.
The rating agency S&P had already lowered its rating for Russia last week, also moving it to the speculative category in the face of the increased risk of sanctions.
The agency also downgraded Ukraine's long-term debt rating by one notch on Saturday, shortly after the same decision by Fitch, which now considers it an extremely speculative investment with risk of default.
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