Moody’s downgraded Russia’s credit rating to Ca, which is the final step

Moody’s on Sunday downgraded Russia’s credit rating to Ca, citing the central bank’s capital constraints as the final point in its assessment, leading to the country’s foreign debt control and default.

The rating agency said its decision to downgrade Russia was “driven by serious concerns about Russia’s willingness and ability to repay its debt obligations”.

The Russian economy has been plunged into crisis following severe sanctions imposed by the West, including the freezing of foreign central bank assets and the withdrawal of several Russian banks from SWIFT international payment systems.

Last week, the central bank suspended payments and on Wednesday banned coupon payments to foreign investors holding ruble-specified sovereign debt.

Moody’s said that default risks have increased and that foreign securities will return only a portion of their investment.

“The potential return for investors will be in line with the historical average, which is similar to the Ca rating,” he said.

M.H.