Standard & Poor’s financial rating agency downgraded evaluation From Russia and Ukraine at one level for each country, because Russian invasion of Ukrainian lands And constant military intervention, putting Russia’s public debt into the category of “junk”.
Russia’s military intervention in Ukraine prompted severe international sanctionsincluding in large areas of the Russian banking system”, explains the S&P in the note accompanying the decision, which was announced last night, which evaluation From Russia is now considered my guess.
“We believe that the announced sanctions could have a significant direct impact and ramifications on economic and commercial activity, consumer confidence and financial stability, and we also expect that geopolitical tensions will have an impact on private sector confidence, hitting economic growth.” rating agency.
In the text reducing the opinion on the quality of Russia’s sovereign credit from BBB- to BB +, that is, to the level of non-investment recommendation, “junk” (or “junk”, as it is generally known in specialized terminology, in English), indicates Standard & Poor’s notes that “there is a tremendous amount of uncertainty about the evolution of the geopolitical conflict and the possibility of additional sanctions, as well as the ultimate financial ramifications of the current restrictions.”
In addition to placing Russia in “credit hour Negative”, ie maintain the review process evaluation Open with further declines likely, S&P also announced that evaluation From Ukraine one level, from B to B-, which plunges the country’s opinion even more into the negative territory.
“The Russian military attack on Ukraine poses risks to economic growth, financial stability, the external situation and public finances, so we are reducing evaluation From domestic and foreign currency to B-, and put it in “credit hour negative”, reads the note issued at the same time as the fall in evaluation from Russia.
We may come to download a file evaluation If the multiple uncertainties associated with the military conflict significantly impair the external liquidity, financial system, or administrative capacity of the Government of Ukraine,” S&P concludes.
One evaluation BB, as in the case of Russia, is in a speculative degree, that is, the debt issuer “is less exposed to short-term risk, but faces significant uncertainties with a negative impact on business, financial and economic conditions”.
Already evaluation B, also at the speculative level which is now applicable to Ukraine, implies that a country is “more vulnerable to trade, financial and economic conditions”, but “currently retains the capacity to meet its financial obligations”.
Russia launched a military attack in Ukraine at dawn today, Thursday, with ground forces and bombing targets in several cities, which has already caused the deaths of at least 120 people, including civilians, and hundreds of wounded in Ukrainian territory, according to Kiev. The United Nations reported 100,000 displaced people on the first day of the fighting.
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