Russia will soon be unable to pay its debts, according to credit ratings agency Fitch.
It comes after widespread international sanctions against Russia following its invasion of Ukraine.
Fitch downgraded its assessment of Moscow’s sovereign debt to a C rating, meaning the risk of a default is considered “imminent”.
President Vladimir Putin’s decision to order all interest payments on government debt held by foreign investors to be paid in roubles has increased the likelihood of the country failing to meet its liabilities, City A.M. reports.
The rouble has dropped to record lows against the US dollar since Russian troops entered Ukraine. As a result, investors holding dollar or euro-denominated Russian debt are likely to see heavy losses.
On Tuesday the United States banned Russian oil imports and the UK said it would phase them out by the end of the year.
“The further ratcheting up of sanctions, and proposals that could limit trade in energy, increase the probability of a policy response by Russia that includes at least selective non-payment of its sovereign debt obligations,” Fitch noted.
