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    Fitch Affirms Ukraine’s Foreign Currency Issuer Default Rating at ‘CCC’

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    The Fitch ratings agency has affirmed Ukraine’s long-term foreign currency Issuer Default Rating (IDR) at ‘CCC’, meaning that default remains a real possibility.

    WASHINGTON (Sputnik) — The ratings agency has also affirmed Ukraine's senior unsecured foreign and local currency bonds at 'CCC'.

    "The affirmation of the ratings reflects a lack of progress on the reform programme needed to unlock donor support, which has been exacerbated by political wrangling," Fitch said in a press release on Friday.

    Fitch argued that the new government of Prime Minister Volodymyr Groysman is likely to move ahead with the reforms.

    "However, given the coalition's narrow majority (one seat) as well as weak party discipline within President Poroshenko's party, Fitch expects progress on further reforms to be piecemeal with continued delays in IMF financing highly probable," the press release said.

    Nevertheless, the rating agency expects Ukraine to meet its external debt repayment obligations, but thinks the failure to secure all planned IMF disbursements could exert pressure on the Ukrainian currency hryvnia and undermine the recovery process.  Fitch also noted that Ukraine’s international reserves fell to $12.7 billion in March from 13.4 billion in December 2015.

    On March 11, the IMF approved a four-year program of financial aid to Ukraine, which stipulates a $17.5 billion loan over the next four years. The Ukrainian government has to implement new economic policies for the IMF to disburse the funds.

    During IMF reviews required in order to disburse funds, the fund determines whether a country’s authorities have taken and implemented necessary measures to be financed. One of IMF’s latest assessments on Ukraine remains incomplete reportedly because of political instability in the country.

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    International Monetary Fund, rating, Fitch Ratings, Volodymyr Groysman, Ukraine
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