The international financial ratings agency Moody's cut Russia's credit rating to one level above junk late January 16 and warned the country was under review for a further downgrade.
Moody's said the sharp decline in oil prices and in the ruble would further erode Russia's economic growth and potential and the ratings agency had concerns about the Russian government's financial strength.
Russia's credit rating was cut by one notch from Baa2 to Baa3. Baa3 is the lowest level for "investment grade" sovereign bonds; another cut would take it to "speculative" or junk bond grade.
Moody's said, "The severe -- and likely to be sustained -- oil price shock, alongside Russian borrowers' highly restricted international market access due to ongoing sanctions, is undermining economic fundamentals and increasing financial stresses on both the public and private sector."
Moody's forecast the Russian economy would contract by some 5.5 percent in 2015 and a further 3.0 percent in 2016, "bringing real growth over the 10 years through 2018 to virtually zero."