Moody’s downgraded the country’s debt by one notch Friday, citing the ongoing conflict in Ukraine, capital flight and falling oil prices. The debt rating is now Baa2, just two notches above “junk” status.
Ongoing tensions with Ukraine led to international sanctions against Russia earlier this year. That has reduced foreign investment and further slowed economic growth, spurring inflation and higher interest rates.
“The longer the conflict in Ukraine and sanctions against Russia last, the more significant will be the damage to investors’ confidence in Russia as a source of profitable investment opportunities,” the agency said in a statement.
A recent slide in oil prices isn’t helping things, either. The commodity is down nearly 12.5% in the last month.
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