S&P Cuts Ukraine Credit Rating To CCC

One of the world’s leading credit rating agencies has downgraded Ukraine in light of political uncertainty and violent clashes in the capital Kiev.

Standard & Poor’s said the downgrade reflected “our view that the political situation has deteriorated substantially”.

It downgraded the economy by one notch, from CCC+ to CCC.

Ukrainians are protesting about the government’s plans to forge closer ties with Russia rather than with Europe.

S&P also put Ukraine on a “negative outlook”, suggesting further downgrades could be possible.

“We believe [the current situation] raises uncertainty regarding the continued provision of Russian financial support over the course of 2014, and puts the government’s capability to meet debt service at increasing risk,” the agency said in a statement.

“We consider that the future of the current Ukrainian leadership is now more uncertain than at any time since the protests began in November 2013.”

The protests began in November last year after President Viktor Yanukovych’s government rejected a far-reaching accord with the European Union in November 2013 in favour of stronger ties with Russia.

Russia has promised financial assistance and cheaper energy prices in return.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza