The rating agency Fitch is ceasing business operations in Russia

FILE PHOTO: Coronavirus disease (COVID-19) outbreak in London
FILE PHOTO: The Fitch Ratings building offices appear empty in Canary Wharf, following the outbreak of the coronavirus disease (COVID-19), London, Britain, May 27, 2020. REUTERS/Dylan Martinez

March 8, 2022

LONDON (Reuters) – Fitch became the second major rating agency to halt its commercial activities in Russia on Monday, effective immediately, saying its analysts outside the country would instead provide their coverage.

Rating firms face twin pressures from Western sanctions banning transactions with targeted Russian firms and a new law passed in Russia last week that threatens prison sentences of up to 15 years for disseminating information the Russian government considers referred to as “false” information. The law prohibits reporting events that could discredit the Russian military.

Fitch and Moody’s, which also suspended operations in Russia over the weekend, downgraded Russia’s sovereign rating by a record six notches earlier this month, warning that Western sanctions had increased the risk of a default.

Both companies, along with fellow major rating agency S&P Global, have also withdrawn or suspended ratings for a number of the most heavily sanctioned Russian and Belarusian banks, including VTB, Promsvyazbank (PSB) and Sovcombank.

“The Fitch Group has decided to cease its commercial activities in Russia effective immediately,” Fitch said in a statement, saying that this affects credit ratings and some other services it provides.

It added it will “comply with all applicable sanctions,” support its Russia-based staff, and “continue to provide the market with its independent analytical views through ratings reporting outside of Russia.”

Russia’s financial markets have been in turmoil over sanctions over its invasion of Ukraine, the biggest attack on a European nation since World War II.

The conflict, which Russia has dubbed a “special operation,” has unleashed a storm of drastic rating downgrades and dire warnings from leading investment banks about the impact on the Russian economy.

S&P has downgraded its Russia rating by an unprecedented 9 notches since Moscow launched its attack. The company did not respond to email questions or phone calls about whether it would also cease commercial operations in Russia.

(Reporting by Noor Zainab Hussain in Bengaluru and Marc Jones in London; Editing by Amy Caren Daniel and Michael Perry) The rating agency Fitch is ceasing business operations in Russia

Caroline Bleakley

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