Western sanctions deal heavy blow to Russia: ‘Default is near’ | Financial

Fitch had previously downgraded Russia’s credit rating to junk, meaning investors in Russian government bonds are at high risk. Industry peers Moody’s and Standard & Poor’s (S&P) now also have junk ratings for Russia. Due to the sanctions, Russia is facing tough economic times and government revenues are being severely affected. This could make Moscow less willing to honor its debt obligations.

Defaulter

Fitch now has a C rating for Russia. That’s just one step above the status indicating a country is truly in default. According to Fitch, it is very likely that Russia will soon become a debt defaulter on government loan repayments, given recent developments. The agency also points to the immediate import ban on Russian oil and gas by the United States. Moscow can respond to this by, for example, not making certain debt repayments, Fitch thinks.

On Monday, Fitch also lowered Belarus’ credit status. The West has imposed sanctions on the Eastern European country for its cooperation with the Russian army. The close ties with Russia are cause for concern, according to Fitch.

Also listen to the podcast Worldly! on the clashing personalities of Putin and Zelensky, the dramatic state of the Russian army and the reticent role of the EU and NATO:

—