London Daily

Focus on the big picture.
Thursday, Sep 18, 2025

War in Ukraine: Russia soon unable to pay its debts, warns agency

War in Ukraine: Russia soon unable to pay its debts, warns agency

Russia will soon be unable to pay its debts, according to a leading credit ratings agency.

Fitch Ratings downgraded its view of the country's government debt, warning a default is "imminent".

The move comes amid increasing international sanctions against Russia following its invasion of Ukraine.

A credit rating is intended to help investors understand the level of risk they face in buying a country's debt - or bonds.

A low rating means the chances of not getting repaid is considered to be high - and so an investor will charge more to lend to that country.

This week, Moscow itself said its bond payments may be affected by sanctions.

The ratings cut - to C from B - is the second time this month Fitch has downgraded its view of Russia's ability to pay its debts.

"This rating action follows our downgrade... on 2 March, and developments since then have, in our view, further undermined Russia's willingness to service government debt," the agency said.

"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," it added.

The announcement from Fitch came after the US and UK said they will ban Russian oil, as they step up the economic response to the invasion of Ukraine.

US President Joe Biden said the move targeted "the main artery of Russia's economy".

Meanwhile, the European Union said it will end its reliance on Russian gas.

As a major exporter of energy, the measures are aimed to hit Moscow's finances, although experts warn this is also likely to send the price of oil and natural gas higher on global markets.

On Sunday, Moscow told investors that it would continue to service its sovereign debt.

However, it warned that international sanctions imposed on its energy industry could limit its ability and willingness to meet its obligations.

"The actual possibility of making such payments to non-residents will depend on the limiting measures introduced by foreign states in relation to the Russian Federation," the finance ministry said in a statement.

In recent days, rival ratings agencies Moody's Investors Service and S&P Global Ratings have also slashed their assessments of Russian sovereign debt.

It means the country's sovereign debt is now considered to be below investment grade, or in "junk" territory, by three of the world's major ratings companies.

S&P said its move followed measures it believed would "substantially increase the risk of default".

Shane Oliver of investment management company AMP Capital believes a default on Russian debt was "effectively already occurring".

"It will only service it in much depreciated roubles anyway and foreign investors are offloading it at fire sale prices. Fortunately the global exposure to it is relatively low," he told the BBC.

The Russian rouble has also hit record lows as countries around the world imposed increasingly tough sanctions on the country.

Last month, Russia's central bank more than doubled its interest rate to 20% in an attempt to stop the value of its currency from sliding further.

Dozens of global brands - including McDonald's, Coca-Cola and Starbucks - have halted business in Russia due to the invasion of Ukraine.

Newsletter

Related Articles

0:00
0:00
Close
Massive Strikes in France Pressure Macron and New PM on Austerity Proposals
Trump Seeks Supreme Court Permission to Remove Fed Governor Lisa Cook
Hillary Clinton’s Reckless Rhetoric Fuels Division After Charlie Kirk’s Assassination
NASDAQ Rises to Record as Intel Soars More Than 20%, Nvidia Gains 3%
Nvidia’s $5 Billion Bet on Intel Reshapes AI Hardware Landscape
Trump and Starmer Clash Over UK Recognition of Palestinian State Amid State Visit
Trump’s Quip on Biden and Google Lawsuit Revives Debate Over Antitrust Legacy
Macron and his wife to provide 'scientific photographic evidence' that she is a real woman
US Tech Giants Pledge Billions to UK AI Infrastructure Following Starmer's Call
Saudi Arabia cracks down on music ‘lounges’ after conservative backlash
DeepMind and OpenAI Achieve Gold at ‘Coding Olympics’ in AI Milestone
SEC Allows Public Companies to Block Investors from Class-Action Lawsuits
Saudi Arabia Signs ‘Strategic Mutual Defence’ Pact with Pakistan, Marking First Arab State to Gain Indirect Access to Nuclear Strike Capabilities in the Region
Federal Reserve Cuts Rates by Quarter Point and Signals More to Come
Effective and Impressive Generation Z Protest: Images from the Riots in Nepal
European manufacturers against ban on polluting cars: "The industry may collapse"
Sam Altman sells the 'Wedding Estate' in Hawaii for 49 million dollars
Trump: Cancel quarterly company reports and settle for reporting once every six months
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
US Launches New Pilot Program to Accelerate eVTOL Air Taxi Deployment
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
Hong Kong Industry Group Calls for HK$20 Billion Support Fund to Ease Property Market Stress
Joe Biden’s Post-Presidency Speaking Fees Face Weak Demand amid Corporate Reluctance
Charlie Kirk's murder will break the left's hateful cancel tactics
Kash Patel erupts at ‘buffoon’ Sen. Adam Schiff over Russiagate: ‘You are the biggest fraud’
Homeland Security says Emmy speech ‘fanning the flames of hatred’ after Einbinder’s ‘F— ICE’ remark
Charlie Kirk’s Alleged Assassin Tyler Robinson Faces Death Penalty as Charges Formally Announced
Actor, director, environmentalist Robert Redford dies at 89
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
JD Vance Says There Is “No Unity” with Those Who Celebrate Charlie Kirk’s Killing, and he is right!
Trump sues the 'New York Times' for an astronomical sum of 15 billion dollars
Florida Hospital Welcomes Its Largest-Ever Baby: Annan, Nearly Fourteen Pounds at Birth
U.S. and Britain Poised to Finalize Over $10 Billion in High-Tech, Nuclear and Defense Deals During Trump State Visit
China Finds Nvidia Violated Antitrust Laws in Mellanox Deal, Deepens Trade Tensions with US
US Air Force Begins Modifications on Qatar-Donated Jet Amid Plans to Use It as Air Force One
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
Elon Musk Retakes Lead as World’s Richest After Brief Ellison Surge
U.S. and China Agree on Framework to Shift TikTok to American Ownership
London Daily Podcast: London Massive Pro Democracy Rally, Musk Support, UK Economic Data and Premier League Results Mark Eventful Weekend
This Week in AI: Meta’s Superintelligence Push, xAI’s Ten Billion-Dollar Raise, Genesis AI’s Robotics Ambitions, Microsoft Restructuring, Amazon’s Million-Robot Milestone, and Google’s AlphaGenome Update
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Musk calls for new UK government at huge pro-democracy rally in London, but Britons have been brainwashed to obey instead of fighting for their human rights
Elon Musk responds to post calling for the murder of Erika Kirk, widow of Charlie Kirk: 'Either we fight back or they will kill us'
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
USA: Office Depot Employees Refused to Print Poster in Memory of Charlie Kirk – and Were Fired
Proposed U.S. Bill Would Allow Civil Suits Against Judges Who Release Repeat Violent Offenders
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
×