Standard & Poor’s has downgraded Russia’s foreign exchange rating, raising the prospect of defaulting for the first time in more than a century. The credit rating agency issued the downgrade to “selective bankruptcy” late Friday. GET FOX BUSINESS IN ENGINE BY CLICKING HERE Earlier in the week, Russia arranged to pay foreign currency bonds in rubles when they expired in dollars. S&P did not expect Russia to be able to convert rubles into dollars within the 30-day grace period. Russian President Vladimir Putin (Mikhail Klimentyev, Sputnik, Photo of the Kremlin pool via AP) (AP / AP Images) The downgrading decision was based in part on the view that sanctions on Russia for its invasion of Ukraine would likely increase further. A selective default rating is when a lender defaults on a particular payment but makes others on time, according to an S&P spokesman. S&P CUT RUSSIA RATING TO EMPLOYEE, MOODY’S TOPICS WARNING The US Treasury Department has blocked the transfer of $ 649 million in government bond holders, preventing Russia from using any of its frozen foreign exchange reserves, according to Reuters. An image shows the Vodovzvodnaya Tower of the Kremlin (L) and the building of the Russian Foreign Ministry. (Photo NATALIA KOLESNIKOVA / AFP via Getty Images) ((Photo NATALIA KOLESNIKOVA / AFP via Getty Images) / Getty Images) S&P and other rating agencies had already downgraded Russia’s debt to “junk”, considering a bankruptcy very likely. CLICK HERE TO READ MORE ABOUT FOX BUSINESS The country has not defaulted on its foreign debt since the Bolshevik Revolution of 1917, when the Soviet Union emerged. The Associated Press contributed to this report.
