Fitch Ratings has downgraded Russia's Long-Term Foreign Currency Issuer Default Rating (IDR) to 'B' from 'BBB'. The ratings have been placed on Rating Watch Negative (RWN), Report informs referring to the agency’s website.
“The severity of international sanctions in response to Russia's military invasion of Ukraine has heightened macro-financial stability risks, represents a huge shock to Russia's credit fundamentals and could undermine its willingness to service government debt,” Fitch noted.
Developments will weaken Russia’s external and public finances, severely constrain its financing flexibility, markedly reduce trend GDP growth, and elevate domestic and geopolitical risk and uncertainty.
The RWN reflects the high degree of volatility in international relations, including the potential for further sanctions tightening and uncertainty over Russia's policy response such as not servicing its debt, and the risk of a more acute loss of domestic economic confidence.
Fitch expects further ratcheting up of sanctions on Russian banks.