LOS ANGELES (AP) – Moody’s Investors Service has cut its rating on Russian government bonds one step closer to “junk” status.
Several agencies have cut Russia’s credit rating in recent months as its economy worsens under the twin pressures of Western sanctions and declining oil prices.
And the ruble has lost about half its value against the dollar since early 2014.
Moody’s on Friday lowered the rating one notch to “Baa3,” the lowest investment-grade level. The firm says it’s reviewing whether to lower the rating further.
Earlier the Standard & Poor’s rating agency had said it would not announce a change in its credit rating for Russia until late January. Standard & Poor’s was widely expected to downgrade Russia’s credit rating to “junk” for the first time in over a decade.
Cuts to a country’s ratings make it more expensive and hurt its ability to borrow money.
Economic development minister Alexei Ulyukayev has said there’s no reason to doubt Russia’s ability to pay its debts, which stand at a low level of 11 per cent of GDP.