Standard & Poor’s confirms Ukraine’s B+ foreign currency rating

Standard & Poor’s confirmed Ukraine’s long-term sovereign B+ rating in foreign currency and downgraded its national currency rating from BB- to B+, it said in an announcement yesterday. The outlook on both ratings is stable. Ukraine’s short-term foreign currency and national currency ratings were confirmed at B. S&P said the ratings were constrained by double-digit inflation, unsustainably high pension spending, political constraints to fiscal consolidation and a significantly leveraged financial sector, with considerable nonperforming loans. The rating agency said that lower inflation, a more sustainable fiscal position (on the back of better performance from Naftogaz) and social security reforms were factors that could lead to a ratings upgrade.