Fitch affirms Ukraine at ‘ B -‘

© RIA Novosti / Vitaly to Belowaverage in fotomontaggi Agency Fitch Ratings. Archival photoFitch affirms Ukraine at ‘ B -‘© RIA Novosti / Vitaly to Belowaverage the image Bank

International rating Agency Fitch confirmed long-term Issuer default rating (IDR) of Ukraine in foreign currency at level «B-«, rating Outlook stable, says the Agency.

Fitch says that the rating reflects Ukraine’s weak external liquidity and high level of demand for external financing due to the need to repay sovereign debt. The Agency notes structural weaknesses of Ukraine «in particular, the banking sector, institutional constraints, geopolitical and political risks».

On the other hand, Fitch points to increase the credibility and consistency of policy, strengthening macroeconomic stability, reducing public debt and the receipt of bilateral and multilateral financial assistance.

«The ongoing interaction of Ukraine with the International monetary Fund (IMF) should soften in the short term financial risks associated with the repayment of debt, payment of which is expected to begin in 2019, and with the elections in 2019», — specifies the Agency.

Prime Minister of Ukraine Volodymyr Groysman on 19 October said that Kiev and the IMF as a result of negotiations agreed on a new program that will begin operating in 2019. The IMF confirmed that it has reached an agreement with the Ukrainian government on a new credit loan for 14 months, the amount of funding equivalent to $ 3.9 billion.

Fitch notes that the government has already been approved by Parliament (first reading) budget for 2019 with a deficit of 2.3% of GDP and increased domestic gas prices by 23%. The Agency expects the IMF Board to formally approve the programme of assistance after the final adoption of the budget.