Fitch has affirmed Ukraine’s long-term foreign-currency issuer default rating or IDR at “B-“ with a stable outlook, the ratings agency said on March 8.
Fitch said that among the positive factors propping up Ukraine’s rating were the country’s cooperation with the International Monetary Fund, its improved economic policy, the onset of macroeconomic stability, declining government debt, and international support.
However, the positive factors are counterbalanced by a lack of sufficient international reserves (3.1 months of current external payments compared to the ‘B’ median of 3.4 months), high needs for external financing, large volumes of external debt repayments, and a weak banking sector, the agency said.
The country’s institutional constraints and political risks also put a negative pressure on the rating.
Alexander Paraschiy, a researcher at Concorde Capital investment bank, commenting on the latest ranking of Ukraine by Fitch said that “there is a high probability of a rating or outlook improvement, provided Ukraine remains committed to the current IMF loan program and is able to agree a new program in 2020.”
Fitch rates Belarus at ‘B’ with a stable outlook – one level higher than Ukraine. Fitch on Feb. 22 upgraded Georgia’s IDR to ‘BB’ from ‘BB-’ with a stable outlook, which is higher than Belarus. Russia is assigned ‘BBB-’ with a positive outlook, a higher rating than that of Georgia.
In the comparison pool of Fitch-rated countries in the region, Poland is top, boasting an ‘A-’ rating with a positive outlook.