Fitch Ratings has further downgraded Ukraine’s credit rating, citing the war-torn country will probably be forced to default.    

The firm dropped Ukraine’s rating from “CCC” to “CC” on Friday, saying that the International Monetary Fund (IMF)'s fresh aid program would not be capable of covering the country's financial requirements, and that private debt restructuring seemed "increasingly probable."

On Wednesday, the IMF pledged $17.5 billion towards a four-year funding package worth $40 billion.

The United States, the European Union and the World Bank have also pledged a further $2 billion each.

The decision comes as Kiev reached a February 15 ceasefire agreement with pro-Moscow forces operating in the country’s volatile east following marathon peace talks in the Belarusian capital, Minsk, with leaders of Russia, Germany and France.

Even with further pledges from international donors it is still not clear how the whole $40 billion will be covered.

Ukraine has been pushed to the brink of bankruptcy following a year of political upheaval and conflict with pro-Russia forces in the east.

The country’s foreign currency reserves were at just $6.4 billion on February 1, having suffered a 63-percent drop in 2014.

"Debt negotiations should lead to up to $15 billion," Reuters quoted a Ukrainian Finance Ministry spokeswoman as saying.

The Ukrainian Finance Ministry is yet to announce what it plans to ask of its debt holders during talks expected to start in early March.

Survival

In accordance to the bailout plan, further international loans are based upon Ukraine’s implantation of reforms as part of a larger austerity drive.

Former Ukrainian Economy Minister Pavlo Sheremeta told Reuters that the country’s desperate financial state should force parliament into passing the required laws.

"Ukraine has promised reforms many times and never missed the chance not to deliver, but this time I'm slightly more hopeful," Sheremeta said. "This is a question of mere survival for Ukraine, it's quite a different ballgame."

SRK/AS/MHB