Fitch lowers ratings of Eurasian Development Bank amid war-related financial shocks

By Ovunc Kutlu

ANKARA (AA) - Fitch Ratings lowered ratings of Eurasian Development Bank (EDB) due to financial shocks after Russia launched its war on Ukraine.

EDB's long-term issuer default rating was lowered to BB+ from BBB+ and placed on Rating Watch Negative, the global rating agency said Thursday.

Its short-term rating was also lowered to B from F1.

"The downgrade reflects the downward revision of solvency to 'bbb', from 'a' previously, due to the severe macro financial shocks resulting from international sanctions in response to Russia's military invasion of Ukraine," the agency said in a statement.

The Rating Watch Negative "reflects the high degree of volatility in international relations, including the potential for sanctions tightening and uncertainty over Russia's policy response, and the impact it may have on the bank's key solvency metrics," it added.

Russian and Belarussian counterparts accounted for 41% and 19% of EDB's loans and guarantees, respectively, and around 30% of its treasury assets at the end of 2021, according to Fitch.

EDB's operating environment and business profile risk are unchanged at the highest level, it added.

Established by Russia and Kazakhstan in 2006, EDB's other members include Armenia, Belarus, Kyrgyzstan and Tajikistan.