Saying that "the tense geopolitical situation between Russia and Ukraine" could accelerate the already heavy flow of money coming out of Russia, Standard & Poor's on Friday cut that nation's credit rating to just above "junk" level.
What's more, S&P says it doesn't expect things to improve anytime soon:
"In our view, Russia's political institutions remain comparatively weak and political power is highly centralized. Protesters, opposition members, nongovernmental organizations, and liberal members of the political establishment have come under increasing pressure. We do not expect the government to decisively and effectively tackle the long-standing structural obstacles to stronger economic growth over our forecast horizon (2014-2017). These obstacles include high perceived corruption, comparatively weak rule of law, the state's pervasive role in the economy, and a challenging business and investment climate."
Also looming: More economic sanctions from the U.S. and its allies as they try to dissuade Russian President Vladimir Putin from further interfering in Ukraine's affairs.
Bloomberg News says the downgrade puts Russia "on par with Brazil and Azerbaijan."
From Planet Money
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