Fitch still foresees a potential Ukrainian capital default.

The international rating agency, Fitch Ratings, has quoted Kyiv’s long-term issuer default rating (IDR) in foreign currency at CC and the national currency at CCC-. According to the agency countries with ratings at these levels, as a rule, do not meet economic forecasts due to high volatility.

It is noted that Kyiv has fulfilled all financial obligations. Liquidity improved significantly in 2022, and the city’s direct debt decreased in line with the repayment schedule.

Kyiv’s total debt dropped to UAH 6.16B. At the same time, there is an increased risk of deterioration in Kyiv’s liquidity and ability to service new debts and support utility companies, Fitch notes.

Uncertainty around the country’s economic rate of recovery, access to the capital market, and the cost of its debt after the war’s end also affect the situation. Nevertheless, Kyiv’s financial situation did not deteriorate in 2022, and the operating balance was positive. Fitch assumes that the situation will not change in 2023.