Credit ratings agency Fitch says Russia will soon be unable to pay its debts.
Fitch Ratings downgraded its view of the country’s government debt, warning that a default was ‘imminent’.
This comes amid increasing international sanctions against Russia following its invasion of Ukraine.
The Financial Times reports that Russia owes roughly $40 billion worth of euro- and dollar-denominated sovereign debt, approximately $20 billion of which is held by foreigners.
This week, Moscow itself said its bond payments may be affected by sanctions.
The ratings cut – to B from C – is the second time this month Fitch has downgraded its view of Russia’s ability to pay its debts.
‘This rating action follows our downgrade… on 2 March, and developments since then have, in our view, further undermined Russia’s willingness to service government debt,’ the agency said.
‘The further ratcheting up of sanctions, and proposals that could limit trade in energy, increase the probability of a policy response by Russia that includes at least selective non-payment of its sovereign debt obligations,’it added.
The announcement from Fitch came after the US and UK said they would ban Russian oil as part of their response to the Russian invasion of Ukraine.
US President Joe Biden said the move targeted ‘the main artery of Russia’s economy’.
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