Russia’s ruble and stock market dropped sharply on Tuesday in response to a recent slide in the price of oil and a downgrade to “junk” status of its sovereign debt by Moody’s.

The global rating agency announced after the Moscow market had closed on Friday that it expected Russia to experience a “deep recession” this year and continued economic contraction in 2016.

Russia’s markets were closed for a public holiday on Monday and the ruble only traded over the counter on thin volume.

But ruble opened the trading day Tuesday off nearly two percent against the dollar from Friday’s close.

The ruble lost slightly more than one percent against the euro while Moscow’s two main exchanges were both down about two percent.

Traders attributed the losses to both the rating cut and the slide in the price of oil, a top Russian export earner.

Moody’s downgrade came slightly less than a month after an identical one by Standard & Poor’s.

Most major Western funds are forbidden from trading debt  stripped of its investment-grade status by two of the world’s three main rating agencies.

Russia’s Finance Minister Anton Siluanov immediately denounced the Moody’s cut as “political” and economically unjustified.

Some Moscow-based economists agreed.

VTB Capital said Moody’s decision appeared to be based on the assumption that Russia’s net capital outflows — estimated at around $150 billion last year — would nearly double to $270 billion in 2015.

“Given $50-60 billion external debt redemptions, Moody’s appears to assume more than $200 billion of domestic capital outflow,” VTB Capital said in a research note.

“This seems extreme, as it would be more than 80 percent of local currency term-deposits in the banking system.”

Others said the cut meant that Russia’s investment climate would remain troubled even if the European Union eased back some of its Ukraine-linked sanctions in the coming months.

“This cements Russia’s loss of investment grade, meaning that even under the optimistic case of sanctions being eased and the oil price recovering, reinstating financial capital inflows to Russia will remain a long-term challenge,” Alfa Bank said.