Credit-ratings agency Moody’s downgraded Russian government debt to junk status Friday, citing the effects of Russia’s aggression in Ukraine and the fallout from low oil prices and a fallen ruble.
Moody’s cut Russia’s sovereign debt from Baa3 to Ba1, which is junk status.
The agency gave three reasons for the move, which had been under consideration since January:
Russia is “expected to experience a deep recession in 2015 and a continued contraction in 2016,” Moody’s warned, thanks to the drop in the price of oil and the sanctions placed on the Russian economy by the U.S.
Furthermore, the ratings agency noted that the ongoing conflict in Ukraine could precipitate a decision by Russia’s government, led by President Vladimir Putin, to delay payments on loans.
Russian debt was previously cut to junk status by Standard & Poor’s last month.
