Fitch lowered the long-term sovereign rating of Ukraine – Russia’s Oil

Fitch lowered the long-term sovereign rating of Ukraine – Russia's Oil

«Oil of Russia», 23.08.14, Moscow, 10:35 Rating agency Fitch lowered the sovereign rating of Ukraine in local currency «B- »to« CCC ». This is stated in a press release from the agency.

Agency thus affirmed issuer default rating in foreign currency at the level «CCC».

Rating of senior unsecured notes in the national currency of Ukraine reduced with «B-» to «CCC», and in foreign currency remained at the level «CCC».

«The new Ukrainian government signed an agreement with the IMF and began an extensive program of economic reforms. According to surveys, the new [parliamentary] elections in October could lead to a strong parliamentary support for the program. However, economic and political risks could derail its realization “, – said in a statement.

These risks indicates Fitch, became reasons for instability in eastern Ukraine and the conflict with Russia. “Despite the fact that the government [of Ukraine] discourage the occupied territories of the rebels, the conflict may continue to grow. This, in turn, delay the recovery and economic revitalization of industry and other assets “, – stated in the statement of the agency.

Agency forecasts, Ukraine’s real GDP decline in 2014, at least 6.5% and threatens zero growth in 2015 and 2016. In the first half of 2014 to 24% reduction in the export of Ukrainian goods to Russia, and the reduction of Russian gas supplies because of a payment dispute will lead to a broad lack of energy, said Fitch.

Deteriorated and the solvency of the Ukrainian government. According to estimates of the agency, the consolidated budget deficit in 2014 will reach 10% of GDP. Fitch also drew attention to the sharp depreciation of the hryvnia – in relation to the dollar since the end of 2013, it fell by more than 37%. In turn, fell and asset quality of the banking system. “The Ukrainian government has budgeted 30 billion hryvnia to support public and private banks and the Deposit Guarantee Fund. However, Fitch believes that the possible need for additional capitalization may be higher, “- said in a statement.

Fitch Ratings in February 2014 lowered the credit rating of Ukraine to pre-default – with« B- »to« CCC . ” The reasons for this then was the political instability in the country and confidence in the Ukrainian currency. The agency also doubted that Russia fully give Ukraine $ 15 billion.

Interviewed in early February 2014 experts have stated that without the Russian loan Ukrainian economy will default. Read more at http://www.oilru.com/news/422995/