Russian markets cautious as investors brace for first credit downgrade to junk in a decade

Russian markets are trading sluggishly as the country braces for the possibility that its credit rating may be downgraded to "junk" level later Friday for the first time in a decade.

Both the ruble and the MICEX benchmark were down less than 0.5 percent in early trading.

Russia's credit rating has been cut by several rating agencies in recent months as the country's economic outlook worsened under the pressure of Western sanctions and declining oil prices.

Standard & Poor's is expected to cut Russia's rating to non-investment grade, a level the country emerged from in 2004.

Economic development minister Alexei Ulyukayev said this week the possible downgrade gives no reason to doubt Russia's ability to pay its debts, which stand at a low level of 11 percent of GDP.