Fitch warns a Russian debt default is 'imminent' as it cuts the country's credit rating again

• Fitch Ratings has cut Russia's credit rating from B to C after the invasion of Ukraine.
• The downgrade reflects Fitch's view that a sovereign default is 'imminent', it said Tuesday.

Fitch Ratings is anticipating an "imminent" Russian default, it said as it cut the country's credit rating for the second time in seven days.

The downgrade from B to a C rating "reflects Fitch's view that a sovereign default is imminent," Fitch said in a statement issued Tuesday.

The statement added that this second downgrade – following the downgrade to the B rating on March 2 – comes because "developments since then have, in our view, further undermined Russia's willingness to service government debt."

"More generally, the further ratcheting up of sanctions, and proposals that could limit trade in energy, increase the probability of a policy response by Russia that includes at least selective non-payment of its sovereign debt obligations," the statement added.

This latest cut represents another six-notch drop for Russia as its ongoing invasion of Ukraine draws international condemnation.

S&P Global has already downgraded the country's rating twice since the invasion of Ukraine and Moody's cut its rating in tandem with Fitch on Thursday last week.

Fitch's previous downgrade was influenced by key rating drivers which included the likelihood of lower GDP growth and increased volatility due to sanctions and the ruble's rapid depreciation. The ruble fell 5% on Wednesday to as low as 136.75 against the dollar.

Russian President Vladimir Putin has already responded to the latest trade sanctions by ordering a ban on select imports to and exports from Russia, according to the Interfax news agency.

This came in response to US President Joe Biden's ban on Russian energy imports and the UK announcement on Wednesday that it would phase out the import of oil from the country by the end of 2022.

Russia's Deputy Prime Minister Alexander Novak said earlier in the week that such a ban would have "catastrophic consequences" for oil prices. Prices have jumped up more than $130 a barrel on Wednesday and continue to climb.

While the looming potential of a Russian default could affect emerging markets as well as China, according to Yale economist Stephen Roach.