The Fitch ratings agency has affirmed Ukraine’s long-term foreign currency Issuer Default Rating (IDR) at ‘CCC’. The ratings agency has also affirmed Ukraine's senior unsecured foreign and local currency bonds at 'CCC'.
The press release reads that the country ceiling has been affirmed at 'CCC' and the short-term foreign-currency IDR at 'C'
The affirmation of the ratings reflects a lack of progress on the reform program needed to attract external financial assistance, which has been exacerbated by political wrangling.
Fitch expects the new government to move ahead with the reforms required to secure the delayed IMF tranche only in the third quarter of 2016. However, Fitch expects progress on further reforms to be piecemeal with continued delays in IMF financing given the coalition's narrow majority and weak party discipline within Poroshenko's party.
Consequently, delays in the next IMF tranche is unlikely to affect the ability of Ukraine to fulfill external obligations in the coming months, but this could have a negative impact on the national currency and prevent the country's economic recovery.
