Fitch Ratings has cut its outlook on Ukraine to stable amid rising concerns over inflation and the country’s current account deficit, reports Reuters.
The ratings agency reaffirmed Ukraine's long-term foreign and local issuer rating at BB-, but said the country's fiscal and monetary policy response to 30 % annual inflation was "half-hearted".
Fitch said Ukraine had so far rejected advice from the International Monetary Fund for a near-balanced-budget. It said Ukraine was allowing its currency to appreciate 3% above its official
band, but without a firm statement from the authorities revising the band or moving to a free float.
It said the central bank seemed to be scaling back from initial tightening of money-market liquidity despite still-high inflation. It also said a clearer anti-inflationary strategy would be positive for the rating, but sustained high inflation would harm economic efficiency, erode credit fundamentals, risk higher macroeconomic volatility and further threaten the rating.
Analysts say Ukrainian authorities have been slow to strengthen the hryvnia, although the currency has moved outside its upper range against the dollar in recent weeks.
