The Fitch Agency downgraded this Tuesday again the qualification of the Russian sovereign debt in long-term foreign currency from “B” to C”, and considers that the breach of its obligations is “imminent”.
According to a statement from the agency, this rating downgrade follows the one announced on March 2, since what has happened since then “has further undermined Russia’s willingness to pay the government’s debt,” referring to the international sanctions imposed. to Russia for its military invasion of Ukraine on February 24.
“More broadly, the further escalation of sanctions and proposals that could limit energy trade increase the likelihood of a political response by Russia that includes at least selective default on its sovereign debt obligations.”, adds the note.
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To a lesser extent, the risk of imposing technical barriers to debt service, including through outright blocking of funds transfer or through clearing and settlement systems, “has also increased somewhat since our last review,” Fitch says. .
The agency also mentions that the application of the regulation of the Central Bank of Russia has restricted the transfer of OFZ debt coupons in local currency to non-residents since the end of last week.
The reduction of the Country Ceiling to ‘B-‘ reflects the expected impact of capital controls by preventing transfer and convertibility, it adds.
The Russian Central Bank announced this Wednesday that it limits to US$10,000 the maximum that a client will be able to withdraw in foreign currency in cash in their foreign exchange accounts, Sputnik reported.
“A client can withdraw up to US$10,000 in foreign currency in cash, and the rest of the funds in ruble, depending on the market exchange rate on the day of withdrawal”, says the statement from the Russian issuer.
The new regulation of the Russian Central Bank is adopted after the decision of the European Union, the United States and numerous other countries to impose economic sanctions on Russia for its invasion of Ukraine on February 24, which has already caused thousands of deaths and more than two million Ukrainian refugees.
