The long-term foreign-currency rating was lowered to B- from B, six levels below investment grade and on a par with Argentina and Lebanon, Fitch said in a statement today. The outlook remains negative, signaling a possible further cut.
Cooperation with the IMF has been suspended twice after Ukraine failed to keep pledges to cut the budget as political leaders jostled ahead of presidential elections in January. The government refused to raise natural gas prices for households and failed to adopt laws to stabilize the financial system. Opposition lawmakers pushed through parliament higher spending on social benefits, including an increase in the minimum wage.
The rest of the article can be found at Bloomberg, as noted in the article this is not a surprise move by Fitch. With the country headed for a presidential election the IMF is taking a wait-and-see approach to Ukraine. However, Ukraine's finances will remain shaky as its economy continues to contract and the IMF sits on the sidelines.
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