As Russia deals with the heavy toll of Western sanctions and falling oil prices, a major credit ratings agency on Monday downgraded the country’s sovereign debt to below investment grade, the first time it has fallen to that level in more than a decade.
With Russia’s oil boom years fading and tensions rising with the West, the ratings agency, Standard & Poor’s, cited narrowing possibilities for the Russian government and companies to service their debt. A looming problem, the agency’s analysts highlighted, was the lack of options for the Russian central bank, which will have to decide this year between propping up the ruble or helping the teetering domestic banking sector.
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Further undermining the ruble on Monday, even before the downgrade, was a burst of fighting in eastern Ukraine over the weekend, resulting in the deaths of 30 people in a rocket attack on the city of Mariupol. The fighting raised the prospects of a new round of United States and European sanctions against Russia.
A version of this article appears in print on January 27, 2015, on page B3 of the New York edition with the headline: S.&P. Cuts Russian Debt One Notch To Junk Level . Order Reprints| Today’s Paper|Subscribe
