FITCH: SOVEREIGN CREDIT RATINGS MAY BE LOWERED WITHOUT IMF LOAN

Sovereign credit ratings may be lowered unless the government fails to unfreeze the IMF’s lending program, said Fitch Ratings. According to Charles Seville, the director of Fitch Ratings’s sovereign group, receiving the IMF loan would reduce refinancing risk, boost investor confidence and so underpin continuing market access. Otherwise, Ukraine is facing declining reserves, depreciation of national currency and thus possibly a downgrade in ratings. In addition, Fitch points out that an approaching external financing gap and the prospect of presidential elections in 2015 mean that the next Ukrainian government has limited time to deliver key reforms following this week's parliamentary elections. Moreover, the agency noted that the 12-month current account gap has widened to 8% of GDP, highlighting the impact of weak external demand and the need for external adjustment. In July 2012, Fitch Ratings has affirmed Ukraine's Long-term foreign currency and local currency Issuer Default Ratings (IDRs) at B with a stable outlook. The agency also affirmed the Short-term IDR at B and the Country Ceiling at B.