The international rating agency Moody’s announced that they lowered the credit rating of Ukraine to Caa2, because of the escalation of the political crisis in the country. The first reason is the extent and nature of an increasingly violent crisis that could eventually dry up the state funding, said the agency. The Moody’s also notes that the prospect of evaluating the Ukraine is now negative, suggesting that it could position the country to decline further in the medium term.
The radicalization of positions between the government and the opposition and the spread of protests have increased the likelihood of serious administrative crisis that could lead to a power vacuum, also mentioned Moody’s. The international rating agency also believes that this instability increases the risk of a large capital flight, which could further weaken the Ukrainian currency. Last Tuesday the rating agency Standard and Poor has downgraded Ukraine, due to the political crisis.
For two months, the Ukrainian government is facing a huge protest movement associated with the rejection of the Partnership Agreement with the European Union. The resignation of the government under pressure from protests were not enough to reduce the volume.
By Nicole P.