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A look at Moscow: on the financial markets it has long been junk
Photo: - / dpa
Western sanctions have made it difficult for Russia on the international financial markets.
But what is supposed to increase the pressure on President Vladimir Putin because of his aggressive war in Ukraine and to get the Kremlin to give in by isolating the Russian economy has unpleasant side effects for investors: experts see Russia's debt service in acute danger.
After 1998, there could be another state bankruptcy – despite a full treasury.
The rating agency Fitch has now lowered Russia's credit rating again.
The company on Tuesday downgraded its credit rating from B to C even lower into the so-called junk zone, which is intended to identify high-risk investments.
The rating now means that a default is likely to be imminent, Fitch said.
The credit watchers justified the assessment with increased doubts about Russia's willingness to pay.
The sanctions due to Russia's war of aggression against Ukraine limit the options for paying off debts to international creditors anyway.
The other two major rating agencies, S&P and Moody's, had recently lowered Russia's credit rating further into the junk zone.
Actually, Russia's treasury is well stocked.
However, the access to currency reserves, which is severely limited by the sanctions, is considered particularly critical.
Billion dollar government bond expires
They are becoming increasingly important to the country as the ruble depreciates, but Russia is finding it harder to access foreign currencies.
Also because the Russian central bank's high reserves of more than 600 billion dollars are effectively blocked.
Stock trading on the Moscow stock exchange has been suspended for more than a week because of the sanctions.
The Russian central bank has now also imposed drastic restrictions on foreign exchange trading.
For example, Russian banks will no longer be able to sell foreign cash to citizens until September 9, the central bank announced during the night.
Putin had already imposed a cap on foreign cash exports of $10,000 per person.
Now you can only withdraw cash in foreign currency from a foreign exchange account up to an amount of 10,000 dollars - and only dollars.
For higher amounts, the rest is paid in rubles at the daily exchange rate.
Even countries that are on Russia's list of "unfriendly countries" are only paid in rubles.
On the other hand, there are no restrictions on exchanging foreign currencies for rubles.
Recently there had been long queues at ATMs.
However, the central bank pointed out that 90 percent of foreign currency accounts held in Russian banks are worth less than $10,000.
In view of this situation, the President of the Berlin DIW Institute, Marcel Fratzscher, believes that a national debt bankruptcy in Russia is very likely in the coming months.
Because of the Western sanctions, there is a high risk that Russia will not service its debts to international creditors, said Fratzscher.
Some German investors would also suffer from a default.
In addition, there could be distortions on the financial markets.
According to the financial news service Bloomberg, Russia has 49 billion dollars in government bonds outstanding in dollars and euros.
More than $100 million in interest payments are due on March 16.
On April 4, a bond worth two billion dollars expires.
"We see default as the most likely scenario," US investment bank Morgan Stanley wrote to clients on Monday.
"I would be shocked - absolutely shocked - if they bother to make their payments later this month," ex-hedge fund manager Jay Newman said in a recent Bloomberg interview.
apr/dpa