Moody's Investors Service on Friday downgraded Russia's sovereign debt rating into junk status, citing the continued crisis in Ukraine, the recent steep slide in oil prices and weakening of the ruble. Moody's downgraded the rating to Ba1 from Baa3, putting it one notch below investment grade. The outlook on the rating is negative, meaning Moody's could downgrade it again in the near term. "The government's financial strength will diminish materially as a result of fiscal pressures and the continued erosion of Russia's foreign exchange (FX) reserves in light of ongoing capital outflows and restricted access to international capital markets," Moody's said in a statement. "The risk is rising, although still very low, that the international response to the military conflict in Ukraine triggers a decision by the Russian authorities that directly or indirectly undermines timely payments on external debt service."
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