(Reuters) – Ratings agency S&P on Thursday cut Russia’s rating to “CCC-” from “BB+”, pushing it further into “junk” territory less than a week after the last downgrade, as fresh international sanctions and the nation’s own protective measures ramped up default risk.
Russia’s invasion of Ukraine, the biggest attack on a European state since World War Two, has thrown its financial markets into turmoil after several countries imposed sanctions and global brands exited the nation in droves.
“The downgrade follows the imposition of measures that we believe will likely substantially increase the risk of default,” the agency said.
New restrictions from the G7 countries and capital controls introduced by the Russian government to protect the rouble could constrain the nation’s ability to pay its debt, S&P said.
The ratings agency also warned of further downgrades as it kept the sovereign on “CreditWatch negative”.
Peers Fitch and Moody’s downgraded Russia’s rating by six notches to junk status on Wednesday, saying Western sanctions threw into doubt its ability to service debt and would weaken the economy. That sent the Russian rouble to new record lows against the dollar and euro on Thursday.
(Reporting by Nishara Karuvalli Pathikkal and Taru Jain in Bengaluru; Editing by Devika Syamnath and Maju Samuel)
