LONDON Dec 3 Ukraine's internal political
problems are already covered by its B- credit rating and it
would take a worsening of its ability to access foreign funding
to provoke another cut, Standard and Poor's said on Tuesday.
S&P downgraded Ukraine at the start of last month and warned
it could cut it further if its international reserves declined
faster than expected and its funding commitments became
increasingly difficult to meet.
The country has plunged into crisis in recent days over the
government's shunning of a trade deal with the European Union,
spurring a standoff between pro-Russian and pro-EU forces.
S&P's primary analyst on Ukraine, Trevor Cullinan, said last
month's downgrade meant the current "economic and political
challenges faced by the country" were already factored in.
However, if the situation continued to deteriorate and it became
difficult for Kiev to get hold of the money needed to pay its
bills, another cut could be on the cards.
"To the extent that these developments impact on Ukraine
securing official financing, they could affect sovereign
creditworthiness," Cullinan added.
President Viktor Yanukovich's decision to tie Ukraine closer
to Moscow has triggered mass protests in Kiev. Its central bank
has been forced to intervene on the currency, and bond and share
prices have fallen.
Prime Minister Mykola Azarov's government has resisted
pressure from the International Monetary Fund to unhitch the
national currency from a tight band around 8 hryvnia to the
dollar and allow greater flexibility to reduce imports and help
narrow the current account deficit.
But the government's ability to meet a heavy foreign debt
repayment schedule in 2014 is undermined by depleted foreign
reserve stocks which at the end of October stood at $20.6
billion - which covers less than two and half months of imports.
(Reporting by Marc Jones; editing by Patrick Graham)