January 31, 2014 / 10:44 PM / 6 years ago

Moody's downgrades Ukraine's sovereign rating, outlook negative

Jan 31 (Reuters) - Moody’s Investors Service downgraded Ukraine’s government bond rating to Caa2 from Caa1 with a negative outlook, citing continued risk of an external liquidity crisis due to the prolonged political uncertainty in the country.

“(The) decision to assign a negative outlook on Ukraine’s Caa2 rating was mainly driven by the continued risk of an external liquidity crisis, even if Russia’s support package were to be disbursed as planned,” Moody’s said in a statement. ()

The former Soviet republic has been gripped by mass street unrest since President Viktor Yanukovich walked away from a trade pact with the European Union last November, opting for closer economic ties with Russia which has brought it a $15 billion bailout package.

Ukraine’s hryvnia tumbled 2.5 percent against the dollar on Friday for its biggest one-day fall since the third quarter of 2009.

On Jan. 28, Standard & Poor’s cut its long- and short-term foreign currency sovereign credit ratings on Ukraine to “CCC+/C” from “B-/B”, with a negative outlook.

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