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S&P Downgrades Russia's Sovereign Rating to 'Junk' BB+ Status

© Sputnik / Alexey Kudenko / Go to the photo bankCredit rating agency Standard & Poor's (S&P) has announced it could downgrade Russia's sovereign debt status
Credit rating agency Standard & Poor's (S&P) has announced it could downgrade Russia's sovereign debt status - Sputnik International
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A “junk” status rating suggests that a country or a company is likely to default on its debt. The so-called “junk” bonds, unlike investment grade bonds, are not generally legal for purchase by banks.

Moody's Investors Service said Tuesday it had downgraded to Baa2 from Baa1 the foreign currency rating of Russia's energy giant - Sputnik International
Moody’s Downgrades Russia’s Government Bond Rating to Baa3
MOSCOW, January 26 (Sputnik) — Standard & Poor's ratings agency said Monday it has lowered Russia's sovereign ratings to 'junk' status from BBB- to BB+ with negative outlook.

"In our view, the Russian Federation's monetary policy flexibility has weakened, as have its economic growth prospects," the agency said in a statement.

"We are therefore lowering our foreign currency sovereign credit ratings on Russia to 'BB+/B' from 'BBB-/A-3' and our local currency sovereign credit ratings to 'BBB-/A-3' from 'BBB/A-2'," the statement said.

Агентство Fitch понизило рейтинги крупнейших банков мира - Sputnik International
Fitch Downgrades Russian Credit Rating Amid Falling Oil Prices
"The outlook is negative, reflecting our view that Russia's monetary policy flexibility could diminish further," the agency affirmed, adding that the ratings could be lowered further if Russia's external and fiscal buffers deteriorate over the next 12 months faster than expected.

In the beginning of 2015, two other prominent international ratings agencies — Fitch and Moody's — downgraded Russia's long- and short-term sovereign credit ratings to just a notch above “junk” status, citing the sharp decline in oil prices and Russia's deteriorating financial flexibility.

A “junk” status rating suggests that a country or a company is likely to default on its debt. The so-called “junk” bonds, unlike investment grade bonds, are not generally legal for purchase by banks.

In light of the news, the already weakened Russian ruble started to slip against the dollar and the euro.

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