S&Ps revises BICRA on Ukraine to group 9.

By bne IntelliNews November 10, 2011
Standard & Poor's Ratings Services said that it is revising its Banking Industry Country Risk Assessment (BICRA) on Ukraine to group '9' from group '10'. It is also maintaining the economic risk score at '10', and assigning an industry risk score of '7', the rating agency said in a statement. According to the statement, the risk score for Ukraine is '10'. In addition to the Ukraine, group '9' also includes Azerbaijan, Venezuela, Jamaica, Paraguay and Cambodia, S&P said. S&P says they reviewed the banking sector of Ukraine (B+/Stable/B; Ukraine national scale 'uaAA-') under their updated BICRA methodology. This reflects the agencys opinion that Ukraine has "very high risk" in "economic resilience" and "economic imbalance", and "extremely high risk" in "credit risk in the economy", as our criteria define these terms. Ukraine's economy remains concentrated, with the metallurgical and chemical sectors comprising more than 60% of the export basket, which makes it vulnerable to external market fluctuations. Under the IMF financing program, Ukraine's government has initiated tax and pension reforms that appear to be improving financial stability prospects. However, further possible policy setbacks could derail the IMF program and thus weaken external, monetary, and fiscal indicators.
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