Credit agency Standard & Poor’s cut Russia’s foreign currency ratings yesterday, saying further downgrades were possible if the West imposed tighter sanctions against Moscow in response to the crisis in Ukraine.

Moscow said politics had played a role in the downgrade, the first by a major agency since Russia seized Crimea from Ukraine in March and leaving the S&P rating just one notch above junk status.

Foreign investors have been pulling money out of Russia since the country’s economy hit the rails last year, a process that has intensified along with western concerns about Ukraine.

S&P said outflows might now speed up further. “The tense geopolitical situation between Russia and Ukraine could see additional significant outflows of both foreign and domestic capital from the Russian economy and hence further undermine already weakening growth prospects,” the agency said in a statement.

Russia’s annexation of Crimea resulted in a first wave of sanctions from the West and both the US and Europe have threatened harsher and more costly measures if Moscow remains involved in its neighbours’ affairs.

Foreign investors have exited Russia en masse, taking $63.7 billion with them in the first three months of this year.

Economic growth has ebbed to a crawl and Russia’s central bank has spent billions of dollars on keeping the rouble from falling too fast.