Russia’s credit rating was cut to junk by S&P Global Ratings,which joined Fitch Ratings in downgrading Ukraine amid an escalation of conflict in the region.
S&P lowered Russia to BB+,below investment grade,from BBB- late Friday and warned of further cuts,citing the “strong” international sanctions slapped on the country following its invasion of Ukraine. S&P also lowered Ukraine to B- from B.
Both countries were also put on review for downgrade at Moody’s Investors Service,which rates Russia Baa3,one notch above junk,and Ukraine at B3,six steps below investment grade.
Fitch took Ukraine’s level down to CCC from B,putting it seven steps below investment grade and on par with El Salvador and Ethiopia.
The war,which entered its third day on Saturday,has prompted the US and its allies to impose a swath of sanctions on Russia. President Joe Biden sanctioned Vladimir Putin and several key aides as Russian troops met opposition in Ukraine’s capital.
“The announced sanctions could have significant direct and second-round effects on economic and foreign trade activity,domestic resident confidence,and financial stability,” S&P said in a statement.
“We also expect geopolitical tensions to drag on private-sector confidence,weighing on growth.”
Bloomberg