BOSTON (AP) – Credit rating agency Standard & Poor’s has downgraded Russia’s ability to repay its foreign debt. On foreign debt for the first time in more than a century.
S&P Global Ratings downgraded to a “selective default” late on Friday, after which Russia arranged to pay foreign bonds in rubles. When they have to pay in dollars on Monday. It said it did not expect Russia to be able to convert rubles into dollars within the 30-day grace period allowed.
The S&P said in a statement that the decision was based on its view that the occupation of Ukraine would impose sanctions on Russia. “It is likely to increase further in the coming weeks, which will prevent foreign borrowers from complying with Russia’s willingness and technical capabilities to respect the terms and conditions of its obligations.”
An S&P spokesperson said that if a lender fails at a certain fee, but others do it at the right time, that is the default rating.
The Kremlin has warned that Russia is ready to pay off its debts and will do so in rubles if its foreign accounts are frozen in foreign currency.
Strict sanctions have been imposed on Russia this week following the conviction of war criminals Civilians were killed in the city of Pucha during the Russian military occupation – banning the use of foreign reserves in US banks for lending.
Russia’s Finance Ministry said on Wednesday it had tried to pay $ 649 million for two bonds to an unnamed US bank – previously known as JPMorgan Chase – but stricter sanctions prevented payments, so it was paid in rubles.
Western sanctions have hit Russia hardAnd S&P and other rating agencies have already downgraded its debt to “junk”.
Russia has tightened capital restrictions and other drastic measures and used the proceeds from the sale of oil and gas to artificially raise the ruble..
The country has not repaid its foreign debt since the Bolshevik Revolution of 1917, when the Soviet Union emerged. Even in the late 1990s, following the collapse of the Soviet Union, Russia was able to repay its foreign debt with the help of international aid. However, this does not repay the domestic debt.
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