The international rating agency Fitch Ratings has downgraded Russia’s long-term issuer default rating in foreign currency from BBB to B. This was announced on Wednesday, March 2, by the agency.
They believe that the sanctions that followed in response to Moscow’s military special operation in Ukraine could allegedly undermine Russia’s ability to service the public debt. In addition, the nature of restrictive measures has increased the threat to macro-financial stability.
The agency believes that the current situation can weaken both the external and state financial position of the Russian Federation, seriously limit its financial flexibility, and also significantly reduce GDP growth and increase domestic and geopolitical risks.
At the same time, it is reported that the rating has been put on review with the possibility of downgrading (RWN).
Earlier Wednesday, Kremlin spokesman Dmitry Peskov said that unfriendly countries would not be able to destabilize the Russian economy. He noted that steps to preserve the Russian economy must be tough and thoughtful.
In addition, he also commented on the decision of Russian President Vladimir Putin to limit the export of foreign currency in excess of $10,000 from the country. Peskov noted that Moscow is imposing counter-sanctions in order to minimize the damage from actions aimed at undermining the integrity of the Russian economy. According to him, Russia “will not shoot itself in the foot.” It is important to analyze in detail the hostile actions of countries that have imposed and continue to impose sanctions, and only then to announce countermeasures. In this situation, saving the economy is possible only if tough and thoughtful steps are taken.
The day before, US President Joe Biden said that the Russian economy was allegedly reeling, but the press secretary replied that it was quite capable of standing on its feet.
On February 24, the Russian Federation launched an operation to protect the civilian population of Donbass. The Ukrainian authorities accused the Russian Federation of hitting its military infrastructure, martial law was introduced throughout the country. Kyiv also severed diplomatic relations with Moscow and recalled its diplomats from the embassy.
Prior to that, on February 21, Russian President Vladimir Putin signed decrees recognizing the independence of the Donetsk and Lugansk People’s Republics (DNR and LNR), as well as treaties of friendship, cooperation and mutual assistance with the republics. The documents were ratified the next day.
The situation in Donbass escalated on February 17, 2022. In the Donetsk and Lugansk People’s Republics, heavy shelling by Ukrainian security forces was reported, including from heavy weapons. The republics announced a general mobilization and evacuation of civilians to the territory of Russia.
For more up-to-date videos and details about the situation in Donbass, watch the Izvestia TV channel.
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