- Standard & Poor's
Rating Services Standard & Poor's rating agency trimmed Ukraine's sovereign credit rating to ‘CCC' also giving the negative outlook, cutting its from the stable outlook and ‘B-' rating. With increasing possibility of Ukraine' default, concerns about the potential impact on the Eastern European nation's has been raised. Shocking photos and reports across many organization's home pages pushed Turkish and emerging-markets' currencies significantly lower, also forcing the S&P 500 to perform a 6% fall from its recent highs.
Amid heating speculation of the government default the cost of insuring Ukraine government debt against default, or the so-called credit default swaps, have risen sharply since the beginning of February. At the same time, hopes that sanctions by the European Union will prompt Ukraine's President Viktor Yanukovych to end the violence, sent Ukraine bonds and stocks higher. Domestic currency, however, plunged more than 8.5% against the U.S. Dollar.
The fact the European Investment Bank had frozen all of its activities in Ukraine can be interpreted as an alarming sign, however, taking into account that Ukrainian bonds account only around 3% of the main credit indexes, the potential impact of the government default is most likely to be absorbed by the financial markets.
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