As Russian President Vladimir Putin continues to bombard Ukraine militarily, financially it is his own country that is taking hit after hit.
For the second time this week, a major financial organization has cut Russia’s credit rating down to junk status, with the decision announced Thursday by Moody’s following the same move a day earlier by Fitch.
The change in financial credibility comes amid crippling economic sanctions being levied at Russia by a worldwide coalition that includes the United States and the European Union.
Those sanctions have come fast and furious, the quickest, hardest hit to any nation in recent memory, and are meant to cripple Russia’s currency, and therefore its ability to fund its invasion of its neighboring nation.
Among the moves made by the global coalition, Russia has been blocked from accessing the SWIFT financial system that links countries throughout the world, an act that restricts Russia’s central bank and blocks over $600 billion in reserves.
The cumulative effect is that the multitude of sanctions will go much farther than “initial expectations and will have material credit implications,” Moody’s wrote in its decision, which lowered Russia’s credit rating six notches from Baa3 to B3.
On Wednesday, Fitch labeled Russia’s rating “watch negative” in dropping it from B to BBB.
Likewise, Russian companies’ stocks are absorbing a huge negative hit, with the S&P also dropping Russia to a “junk” rating and the MSCI eliminating Russian stocks from its Emerging Markets indexes.
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