Standard & Poor's (S&P), one of the most respected and influential international rating agencies, is reported to have downgraded Ukraine’s sovereign ratings. In particular, the agency cut the long-term and short-term ratings to junk – from "B-/B" down to "CCC+/C".
The rating was also downgraded according to the national scale – from "uaBBB-" down to "uaBB+". At the same time Standard & Poor's website tells us that short-term and long-term ratings for the national currency remain around "B-/B".
Apparently, the major reason for the rating cut was the severe political confrontation in Ukraine called Maidan. At the same time, the experts working for the rating agency report that if President Yanukovich loses his power and the political relations between Russia and Ukraine worsen, the latter may lose the opportunity to get the $15bn aid promised by Russia. The negative forecasts means that the agency may implement another rating cut within the next 12 months.
Meanwhile, the Ukrainian Hryvnia keeps devaluing against the US Dollar. At this point, the USD/UAH exchange rate aahs reached 8,5050, as of January 29th. At the same time, most analysts are convinced that the Ukrainian currency is about to face major devaluation in the near future. The chart below, courtesy of Masterforex-V Academy, reflects the current state of affairs in the market of USD/UAH:
USD/UAH" title="USD/UAH" align="bottom" border="0" height="242" width="474">