Russian bond default ‘imminent’, warns Fitch, as sanctions hit economy – business live | Business

[ad_1]

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Russia is on the brink of defaulting on its debts, rating agency Fitch has warned, as the sanctions imposed since the Ukraine war batter its economy.

Fitch has downgraded Russia’s sovereign debt to its second lowest level, down six notches to C. That’s just one step above borrowers who have defaulted.

The agency warns:

The ‘C’ rating reflects Fitch’s view that a sovereign default is imminent.

AFP News Agency (@AFP)

#UPDATE Ratings agency Fitch again downgrades Russia’s sovereign debt rating farther into junk territory from “B” to “C”, saying the decision reflects the view that a default is “imminent”.

“Junk” status is the category of countries at risk of not being able to repay their debt pic.twitter.com/TNCfu3JFNb

March 9, 2022

Fitch said that developments since it last downgraded Russia on March 2nd had furtherd the country’s willingness to service government debt.

It points to President Vladimir Putin’s decree last week that Russian creditors can use roubles to pay some foreign currency debts, and the country’s central bank’s restriction of some rouble-denominated debt coupon transfers.

The intensifying sanctions could also lead Moscow to default on its obligations, Fitch says:

The further ratcheting up of sanctions, and proposals that could limit trade in energy, increase the probability of a policy response by Russia that includes at least selective non-payment of its sovereign obligations.

The statement comes after the US and UK said they will ban Russian oil, as the economic response to the invasion of Ukraine continued to ratchet up.

Russia is due to make its next debt repayment on March 16 — though it would have a 30-day grace period to meet the coupon payments.

Western sanctions, including a ban on Russia’s central bank from accessing foreign currency reserves, have preventing Putin from accessing much of the $630bn war chest built up in foreign currencies before the invasion.

Yesterday, a flurry of major Western countries suspended business in Russia, with Starbucks, Coca-Cola, Pepsi and McDonald’s joining the pullout following the Ukraine war.

Shell announced plans to withdraw from Russian oil and gas and Unilever has said it will stop importing and exporting its products with Russia:

European markets are set to open higher, with the FTSE 100 on track to jump more than 1% at the open.

Jeremy Naylor (@JeremyNaylor_IG)

#Wednesday mkts: #Europe expected up but looks fragile. China down #HangSang new 5½ yr low. List of Co’s out of #Russia grows. #Oil up as US UK EU plans to ban Russian output. #Gold near record highs. LME halts #Nickel trade – #China trader looses billions in Nickel short. pic.twitter.com/HugYHdRw1S

March 9, 2022 The agenda 3pm: US JOLTs job openings total in January 3.30pm GMT: IEA weekly US oil inventory figures
.

[ad_2]