- S&P has reduced Russia's rating by one notch to BBB-, or one grade above junk level, and kept the country's outlook at negative.
- The agency cited the risk of further capital flight due to the Ukraine crisis. In Q1, outflows doubled on year to $50.6B and the government has forecast that the full-year figure could hit $70-100B. An increase in sanctions on Russia could also prompt S&P to further reduce the country's rating.
- S&P's action comes a day after Russia began military exercises on its border with Ukraine in response to the latter's security forces killing five pro-Moscow rebels during its attempts to reassert control over the eastern part of the country. The developments have increased fears that Russia may invade eastern Ukraine, the nation's industrial heartland.
- Russia's Micex index is -1.6% and the USD-RUB is +0.4% at 35.925 rubles.
- More on Ukraine ETFs: RSX, RUSL, ERUS, RUSS, RSXJ, RBL, GUR, ESR, RUDR