Fitch affirms B rating for Ukraine with Positive outlook

Fitch Ratings reported on March 6 that it has affirmed
Ukraine’s IRD at B with a Positive outlook. The agency considers Ukraine’s
inflation and international reserves coverage of imports to be close to the
median of B-rated countries, while the nation’s state budget deficit and state
debt-to-GDP ratio are better than those of its B-rated peers. At the same time,
Ukraine’s short-term external financing needs remain high relative to peers,
Fitch noted.

The agency’s positive outlook reflects its expectation
that “continued engagement with the IMF under a new multi-year programme will
help support a sustained reduction in refinancing risks.” Among the key risks
for the rating, Fitch listed external financing pressure that may stem from a
“failure to agree upon an IMF programme or delays in disbursements from it.”
Fitch sees an IMF deal with Ukraine in 1H20 as its baseline scenario.

Alexander Paraschiy: Ukraine’s
fundamentals look indeed better than those of its B-rated peers. And Ukraine’s
high refinancing needs of 2020 (with about USD 5 bln in external debt due this
year) is the only concern taking into account the recent market turmoil. In
such a situation, a soon-IMF deal is important for Ukraine’s country rating and
for its outlook not to suffer.