R&I upgrades Ukraine's foreign currency issuer rating to B

R&I upgrades Ukraine's foreign currency issuer rating to B

Ukrinform
Japanese rating agency Rating and Investment Information (R&I) has upgraded Ukraine's foreign currency issuer rating from CCC + to B, the outlook is stable.

“Ukraine's economy will continue to recover. Its fiscal position has improved. Economic stability has increased thanks to disciplined fiscal policy, as well as monetary policy focused on inflation control. The current account balance remains in slight deficit. With foreign reserves expanding, its resilience to external shock is improving,” reads the agency’s report, the Ministry of Finance of Ukraine reports.

The analysts note that Ukraine’s GDP grows, while the inflation is on a downward path. A temporary widening of the current account deficit to 3-4% will have no impact on its creditworthiness. To ensure foreign currency liquidity for large external debt repayments and maintain a sound financing environment, financial support by the International Monetary Fund will be important.

“The ratio of outstanding government debt to GDP, which started to fall after reaching 69.2% at end2016, stood at 52.3%, and 60.9% even with government-guaranteed debt included, as of end-2018. Following the establishment of the connection to the network of Clearstream, the international central securities depository, in May 2019, the country is witnessing an increase of non-resident holdings of domestic government bonds,” the news release reads.

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