It is reported that Fitch rating agency downgraded Ukraine long term foreign and local currency Issuer Default Ratings from ‘B' to ‘B-‘. The Negative ratings outlook was retained. The decision was related to Ukraine failure to receive the fourth tranche of IMF loan which was supposed to e released in mid November 2009.

The Agency indicates that the absence of the needed financing may lead to depletion of NBU international reserves and to an uncontrolled money emission in the country. The decrease of the sovereign ceiling of the country has led to the downgrading of nine Ukrainian banks ratings including that of Ukrsotsbank and Forum.

According to Millennium Capital analyst “We see the rating downgrade to reflect the deterioration in Ukraine’s governance, rather than changes in its economic development. However, we do not exclude an increase in the money emission through the year end, which may result in hryvnia devaluation and an inflationary pressure mounting. We expect that a possible rating upgrade following the Presidential election.

(Sourced from Millennium Capital)