War in Ukraine: For Fitch, the risk of a Russian default is imminent


The rating agency Fitch again lowered its rating on Russia’s debt on Tuesday. A decision meaning that the risk of a “default” is “imminent” for it.

The rating of Russian debt was therefore downgraded from “B” to “C”, in view of “developments which have further undermined Russia’s willingness to repay public debt”, the agency said.

The lower this rating, the less confidence lenders will have in the country and the less it will be able to borrow money at reasonable interest rates.

At the beginning of March, like other major agencies S&P Global Ratings and Moody’s, Fitch had already placed Russia’s long-term debt rating in the category of countries likely to be unable to repay their debt due to the accumulation of sanctions. economic attacks against him after the invasion of Ukraine.

Last payment default in 1998

To justify its decision, Fitch cites a presidential decree signed on March 5 that could authorize Russia to reimburse creditors of certain countries in rubles rather than foreign currency. The agency also mentions a decision by the Russian central bank to restrict the transfer of certain bonds to non-residents.

“More generally, tougher sanctions and proposals that could limit energy trade increase the likelihood of a political response from Russia that includes at least a selective non-payment of its sovereign obligations,” Fitch explained.

Technical barriers, such as the blocking of funds transfers, could prevent the repayment of the debt.

Moscow has not experienced a default since 1998.



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