Russia's bankruptcy just a matter of days

All three major rating agencies have already degraded Russian government debt to junk status. Moreover, the cost of insuring investors against Russia's insolvency has skyrocketed to almost $3,000 for every RUB 10,000 hole. Russia's economy, which is subject to unprecedented and constantly tightened sanctions, is shaking in its foundations and its bankruptcy is a matter of weeks or even days.

Fitch has downgraded Russia's rating from B to C and explained that this is an expression of the assessment that the country's insolvency is inevitable. Previously, the S&P and Moody's agencies degraded the Russian government's debt securities to the level commonly referred to as "junk".

Although the Russian government declared on Sunday that it would continue to service its foreign debt, it noted that Western sanctions may limit not only the ability but also the propensity to meet financial obligations.

The investment bank Morgan Stanley on Monday announced that Russia could go bankrupt in mid-April, but in the meantime, the United States announced an embargo on Russian oil imports, which further worsened Russia's economic outlook, meaning insolvency could continue in March.

(bizblog)