Fitch: Ukraine unaffected

Fitch Ratings said that while current heightening of political tensions in Ukraine is leading to increased political risk in the near term, Ukraine's economy is performing strongly and the ratings should remain unchanged because the agency's long-standing concerns about political risk are already factored into the country's BB- foreign-currency issuer default rating, which is relatively low in view of Ukraine's comparatively favorable macroeconomic and financial ratios.

The outlook remains positive.

"The long-running rivalry between president Yushchenko and prime minister Yanukovych has come to a head over the president's attempt to call fresh parliamentary elections. The crisis clearly raises political risk in the near term," Andrew Colquhoun, director in Fitch's emerging Europe sovereigns team, said in an agency rating.

"But if the crisis can be resolved peacefully, Ukraine could come out of it with stronger political institutions. That would decrease the salience of political risk and put more weight on strong economic fundamentals."

There remains the risk of a breakdown in political dialogue and a consequent spilling of tensions onto the streets, Fitch said, but if the crisis can be resolved peacefully in the next few months without inflicting serious damage on the economy, as the agency expects, then there would likely be no negative rating action.

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