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Russian economy inches closer to collapse

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Ratings firm Fitch has downgraded Russia’s sovereign rating by six notches further into the junk territory to C from B, warning a default is imminent as sanctions and trade restrictions force the nation’s economy closer to collapse.

Russia’s country’s financial markets have been thrown into a turmoil by Western sanctions since the invasion of Ukraine, raising significant concerns over its ability and willingness to service debt.

Fitch pointed to a presidential decree that could potentially force a redenomination of foreign-currency sovereign debt payments into local currency for creditors in specified countries.

“‍Further ratcheting up of sanctions and proposals that could limit trade in energy increase probability of a policy response by Russia that includes at least selective non-payment of its sovereign debt obligations,” the ratings agency said.

The US and Britain announced bans on Russian oil on Wednesday, a significant move that will pile more pressure on Mr Putin to halt his forces.

Ukrainian President Volodymyr Zelensky tweeted his thanks following US President Joe Biden’s announcement.

“Thankful for US and @POTUS personal leadership in striking in the heart of Putin’s war machine and banning oil, gas and coal from US market,” he wrote.

In a video posted to Telegram later, Mr Zelensky said the US had “taken a step that will significantly weaken the invaders”.

“It will make them pay for aggression and be responsible for the evil they have done. For all the evil,” he said.

“America bans imports of oil from Russia, petroleum products, gas, coal. Prohibits US citizens from any investment in Russia’s fuel and energy sector.”

On March 16, Russia is due to pay $US107 million ($A148 million) in coupons across two bonds, though it has a 30-day grace period to make the payments.

The C rating in Fitch’s assessment is only one step above default, bringing it in line with the Moody’s current equivalent score of Ca.

The change comes less than a week after Fitch revoked Russia’s investment-grade status, slashing its rating to B from BBB.

Peers Moody’s and S&P also lowered their sovereign ratings.

First lady’s powerful message to the world

The first lady of Ukraine, Olena Zelenska, has accused Russia of “mass murder of civilians” in a powerful statement about the devastating invasion of her homeland.

Ms Zelenska, the wife of Ukrainian President Volodymyr Zelensky, said Russian President Vladimir Putin had “underestimated our country, our people, and their patriotism” in a statement released on social media on Wednesday (Australian time) nearly two weeks after Russia launched its deadly assault.

“Despite assurances from Kremlin-backed propaganda outlets, who call this a ‘special operation’ – it is, in fact, the mass murder of Ukrainian civilians,” Ms Zelenska said.

“While Kremlin propagandists bragged that Ukrainians would welcome them with flowers as saviours, they have been shunned with Molotov cocktails.”

Ms Zelenska, who has son Kiril, 9, and daughter Aleksandra, 17, with Mr Zelensky, wrote that “an overwhelming number of media outlets from around the world have reached out with requests for interviews”.

“This letter serves as my answer to these requests and is my testimony from Ukraine,” she wrote.

Ukraine’s humanitarian crisis is escalating by the day, with the United Nations human rights office confirming on Wednesday that there had already been 1335 civilian casualties in Ukraine – 474 who had died and 861 injured. The number of refugees created by the biggest assault on a European country since World War II has topped two million.

But Ms Zelenska also wrote of the toll of the invasion on her country’s children.

“Perhaps the most terrifying and devastating of this invasion are the child casualties. Eight-year-old Alice who died on the streets of Okhtyrka while her grandfather tried to protect her. Or Polina from Kyiv, who died in the shelling with her parents. 14-year-old Arseniy was hit in the head by wreckage and could not be saved because an ambulance could not get to him on time because of intense fires,” she wrotel.

“The first newborn of the war saw the concrete ceiling of the basement, their first breath was the acrid air of the underground, and they were greeted by a community trapped and terrorised. At this point, there are several dozen children who have never known peace in their lives.”

Ms Zelenska also thanked people from around the world for supporting her country, as she echoed her her husband’s demands for a no-fly zone over Ukraine.

“Close the sky, and we will manage the war on the ground ourselves,” she said.

olena zalenska
The Zalenskys with their children, son Kiril and daughter Aleksandra. Photo: Instagram/Olena Zalenska

Western allies and NATO have so far rejected Mr Zelensky’s repeated pleas for a no-fly zone over Ukraine, fearing it would risk a direct military conflict with Russia and evolve into a wider war with a nuclear-armed superpower.

“I testify and tell the world: The war in Ukraine is not a war ‘somewhere out there’. This is a war in Europe, close to the EU borders. Ukraine is stopping the force that may aggressively enter your cities tomorrow under the pretext of saving civilians,” Ms Zelenska finisher her statement.

“If we don’t stop Putin, who threatens to start a nuclear war, there will be no safe place in the world for any of us.”

-with AAP