Fitch and Moody's both downgraded Russia's sovereign credit rating to "junk" status on Wednesday, citing Western sanctions as putting Russia's ability to service its debt in doubt and weakening its economy.
Sanctions implemented in response to Russia's invasion of Ukraine, the worst attack on a European state since World War II, have thrown Russia's financial markets into chaos.
The invasion has resulted in a flurry of credit rating changes and severe warnings about the economic impact on Russia. Last Friday, S&P downgraded Russia's credit rating to junk.
It also caused index producers FTSE Russell and MSCI to announce on Wednesday that Russian shares will be removed from all of their indexes, with a top MSCI executive calling Russia's stock market "uninvestable" earlier this week.
The decision will take effect on March 7, according to FTSE Russell, while MSCI stated it will be executed in one step across all MSCI indexes as of March 9 close. MSCI recently announced that the MSCI Russia Indexes will be reclassified from developing markets to standalone markets.
Russia has a 3.24 percent weighting in MSCI's emerging market benchmark and a 30 basis point weighting in the index provider's global benchmark.
This year's economic growth is expected to be in the double digits, according to the Institute of International Finance.
Russia's ratings were lowered to "B" from "BBB" by Fitch, and the country's ratings were placed on "rating watch negative." Moody's, which had hinted at a downgrade last week, slashed the country's credit rating by six notches, from Baa3 to B3.
"The severity of international sanctions in reaction to Russia's military invasion of Ukraine has heightened macro-financial stability concerns, represents a severe shock to Russia's credit fundamentals, and could undermine Russia's readiness to pay government debt," according to a research by Fitch.
According to Fitch, US and EU sanctions forbidding any transactions with Russia's Central Bank would have a "far bigger impact on Russia's credit fundamentals than any previous sanctions," rendering much of Russia's international reserves useless for foreign exchange intervention.
"Sanctions may put a damper on Russia's readiness to repay its debt," Fitch cautioned. "President Putin's decision to put nuclear weapons on high alert looks to reduce the likelihood of him altering direction on Ukraine to the extent required to reverse swiftly tightening sanctions."
Fitch anticipates more sanctions against Russian banks to be imposed.
"The sanctions imposed by Western countries will significantly reduce Russia's GDP growth potential, which was previously estimated at 1.6 percent," Fitch said.