Moodys lowers Ukraines rating outlook to negative

Moody’s Investors Service revised the outlook on Ukraine’s B2 local and foreign-currency government bond rating from stable to negative. According to the agency, increased fiscal and external liquidity pressures against the backdrop of the stalled IMF program might prove budget financing and debt redemptions difficult in 2012. Deterioration in the external environment (incl. capital markets) increased downside risks to economic growth and heightened pressure on the country’s currency peg to the US dollar. Moody’s said Ukraine’s rating could be upgraded if ambiguity concerning the country’s monetary and exchange rate policy is reduced and the government pursues more consistent economic policy. However, if fiscal consolidation and disbursements from the IMF are further delayed, the rating could be downgraded.