Home Economy S&P rating agency downgraded Ukraine’s credit rating

S&P rating agency downgraded Ukraine’s credit rating

The S&P rating agency has downgraded Ukraine’s long-term foreign currency credit rating from CCC+ to CC. On Friday, July 29, Bloomberg reported.

It is noted that this decision was made by the organization after Ukraine turned to its creditors for a delay in payments on its external debt.

In addition, S&P upheld its negative outlook on the country, as there is still a high probability that Kyiv will continue to implement plans to restructure its external debt. The agency could again downgrade Ukraine to selective default if Ukrainian authorities force bondholders to agree to a two-year freeze on payments and change coupons on so-called GDP warrants by the middle of next month.

On July 22, the international rating agency Fitch Ratings downgraded Ukraine’s long-term issuer default rating in foreign currency from ‘CCC’ to ‘C’. It is noted that this level indicates the pre-default state of the economic situation in the country.

On July 21, Finance Minister of Ukraine Serhiy Marchenko said that Kyiv is counting on support from partners, the expected amount of material assistance from the West for the year is about $16-17 billion.

Meanwhile, on July 19, EU representative in Kyiv Matti Maasikas said that the financial situation in Ukraine is difficult, but the country is unlikely to default on its external debt. At the same time, he noted that the country’s monthly budget deficit is € 5 billion.

Earlier, on May 22, it was reported that the international rating agency Moody’s downgraded Ukraine’s credit rating to “Caa3” – the third, the lowest level. It was clarified that the country’s ability to pay its external debt in the medium term is low, so now Ukraine is on the same level as the inveterate defaulters – Ecuador and Belize.

According to the Ukrainian State Statistics Service, annual inflation in the country accelerated to 21.5% in June, which is 3.1% higher than in May. Bloomberg notes that this figure was the highest in the past six years. In an interview with Forbes, the former deputy head of the National Bank of Ukraine Oleg Churiy predicted that by the end of the year inflation could accelerate to 30%, and reserves could fall to a critically low level.

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