Fitch downgrades to Ukraine, warns more cuts could come

NEW YORK Fri Nov 8, 2013 11:48am EST

NEW YORK Nov 8 (Reuters) - Fitch on Friday downgraded Ukraine's sovereign rating by one notch and warned more cuts could be on the way, pointing to the country's shaky financing position and possible roadblocks to foreign currency borrowing.

Fitch cut the country to B-minus from B, with a negative outlook.

"The downgrade reflects an increasingly fragile external financing position, and constraints on the sovereign's ability to borrow in foreign currency to refinance heavy external debt repayments through 2014-2015," Fitch said in a statement.

Ukraine's economy is dominated by steel and chemical exports, sectors which have been badly hit by weakening global demand.

Key indicators show the economic situation is significantly worse now than it was a year ago, and analysts believe that Kiev may have to turn to the International Monetary Fund for help soon.

Moody's rates the country Caa1; Standard and Poor's rates the country B-minus. All three major agencies rate the country well into speculative, or junk, territory.