S&P Global Ratings lowered its foreign and local currency sovereign credit ratings on russia to CCC-/C from BB+/B and BBB-/A-3, respectively. The ratings remain on CreditWatch with negative implications, where we placed them on Feb. 25, 2022.
The downgrade follows the imposition of measures that S&P believes will likely substantially increase the risk of default. The new G7 government restrictions were imposed on russia in response to its accelerated military actions in Ukraine.
S&P estimates that international sanctions have reduced russia’s available foreign exchange reserves by as much as one half, including foreign currency deposits and securities domiciled in the U.S., the EU, and Japan. This has substantially weakened russia’s external liquidity during a period of rising foreign currency demand.