The rating agencies were quick to take action in the wake of Russia’s invasion of Ukraine. S&P downgraded Russia’s credit rating to a “junk” level and warned: “Sanctions on Russia could have significant negative consequences for the functioning of the country’s banks.” At the same time, Moody’s announced that it was passing the Russian credit rating for examination before being downgraded to “junk”
Russia’s invasion of Ukraine led to immediate action by international rating agencies. The S&P agency downgraded Russia’s credit rating to junk status, while Moody’s warned that it was also on its way there and stressed that it had passed the Russian rating for examination before downgrading it to junk status. At the same time, S&P and Fitch announced a downgrade of Ukraine’s credit rating for fear of the country’s insolvency.
Russia’s and Ukraine’s financial markets have been caught in the wake of this week’s events, described as Europe’s biggest military offensive since World War II, leading to stiff Western sanctions on Moscow.
S&P downgraded Russia’s long-term foreign currency credit rating to BB + from ‘BBB-‘, warning that it could downgrade it further, after receiving further clarification on the macroeconomic implications of the sanctions.
“In our view, the sanctions announced to date may have significant adverse effects on the ability of the Russian banking sector to act as a financial intermediary for international trade,” S&P said.