The international rating agency Fitch lowered the long-term issuer default rating of Ukraine in local currency «B-» to «CCC», or “highly speculative” level, while foreign currency IDR: affirmed at «CCC».
Senior unsecured bonds of Ukraine in foreign currency affirmed at «CCC», in national currency – downgraded from «B-» to «CCC».
The ceiling is the country’s rating by Ukraine at the level «CCC» , Short-term foreign currency rating – «C».
The main assumptions in the rating Fitch Ukraine at the moment: Kiev will continue to receive loans from the International Monetary Fund and the support from the European Union and other multilateral international units and organizations at that Ukraine “will avoid a full-scale invasion,” according to “Economic truth».
The downgrade reflects the impact of the ongoing processes in the country’s political transformation, the fight against the separatists, the negative impact of instability in eastern Ukraine and disputes with Russia on the economy, says in the message.
According to Fitch, Ukraine’s real GDP will shrink by 6.5% in 2014, which is much worse than the February forecast agency. In the years 2015-2016 the economic growth will be zero.
Fitch notes the decline in exports from Ukraine to Russia in I half-year by 24% and the risk of energy shortages.
The ratings also take into account the weakening of the Ukrainian national currency and deterioration in asset quality of the banking system.
Further downgrades may result in exacerbation of the political or economic tensions to the level of potential default.
Improving credit assessment of Ukraine depends on the restoration of political stability, the implementation of agreed with the IMF economic reforms, improving external liquidity.
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