Fitch Ratings just downgraded Russia’s credit to a “c” or junk status and say that default is imminent:
www.washingtonpost.com/...
Fitch Ratings downgraded Russia’s credit to “C,” or junk status, cautioning investors on Wednesday that Moscow was careening toward an inability to make good on its debts. Moody’s and S&P Global, the two other dominant international credit agencies, made similar moves in recent days.
The downgrades are signals to investors to steer clear of Russia, lest they get caught up in the expanding sanctions or sink money into assets that are bleeding value by the day. But a default, which analysts are beginning to see as inevitable, could have far more sweeping consequences, sending lenders scurrying for financial high-ground and fleeing developing international markets that rely on risk-tolerant investors.
Inside Russia, a default would mean tremendous economic hardship for ordinary people. A lack of capital could mean massive unemployment, with the government and other major employers unable to raise funds to meet salaries. Consumer credit would evaporate, with Russian banks cut off from international financial systems.
Russians are scrambling to take out money in currencies other than the ruble. On the Telegram chat app, which is highly popular in Russia, people on Wednesday were sharing the locations of ATMs that had euros and dollars available. One Telegram group alone had around 23,000 users.
Putin rose to power in the late 1990s on the heels of Russia’s 1998 default and financial crisis. Now he risks presiding even more extreme economic suffering as he prosecutes his unprovoked war in Ukraine.