Standard & Poor's downgraded Belarus on Tuesday, lowering the Eastern European nation further into junk territory.
The ratings service cut Belarus's long-term foreign-currency rating to B from B+, leaving it five steps into junk, and the firm cut the country's long-term local-currency ratings to B+ from BB. S&P's outlook on the ratings is negative.
The cuts "reflect the country's heightened vulnerability to negative external financing trends because of the deterioration in usable reserves," said S&P credit analyst Ana Mates.
Further downgrade could come if the country's external-financing plans are hurt by an increase in interest rates or unexpected impediments to securing external funding, S&P said. The ratings also could stabilize at their current level if the country were to "bolster its net international reserves," which would likely entail starting reforms to strengthen competitiveness.
Moody's Investors Service late last year said it had a negative outlook on Belarus's banking system because of "significant uncertainties" surrounding the government's abilities to support the state-controlled banking system and the overall economy.
By Nathan Becker, Dow Jones Newswires; 212-416-2855; email@example.com
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