WASHINGTON, March 5 ― Moody's Investors Service yesterday joined other ratings agencies, downgrading Ukraine's debt to Caa2 from B3 due to the worsening crisis following Russia's invasion.

The move follows similar moves by Fitch and S&P Global Ratings last week, when Moody's warned that a downgrade was possible.

The agencies also have cut Russia's debt rating, and both countries could face further downgrades, Moody's said.

“The two-notch downgrade of Ukraine's ratings and the decision to maintain the ratings on review for further downgrade were triggered by the intensification of Russia's military invasion of Ukraine,” Moody's said in a statement.

“The intensification of the military invasion of Ukraine could have implications for sovereign debt repayments.”

And despite pledges of substantial international financial support it will not be sufficient to allow the country to make payments given the large costs inflicted by the war, the agency said.

In addition, Moody's cited “the heavy human toll and the damage to Ukraine's productive capacity.”

The government faces external repayments of around US$6 billion (RM25 billion) in 2022 and between US$2-6 billion each year over the next decade, and held foreign currency reserves of US$27.5 billion at the end of January 2022, the statement said.

IMF Chief Kristalina Georgieva and World Bank President David Malpass each spoke yesterday with Ukraine President Volodymyr Zelenskyy to renew their pledges of support for the war-torn country.

The World Bank is preparing US$3 billion in aid, including an immediate release of US$500 million which the board is expected to approve on Monday, the bank said yesterday.

That initial disbursement ― raised from the original US$350 million ― will be followed by another US$200 million by the end of the month, the bank said.

The International Monetary Fund has an existing US$2.2 billion loan package with the country, and has pledged to release further emergency financing, although the amounts has not been announced. ― AFP